Notices. Notice of information collection

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A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

BILLING CODE 4410-15-M NATIONAL AERONAUTICS AND SPACE ADMINISTRATION [Notice: 07-006] Notice of Information Collection AGENCY: National Aeronautics and Space Administration (NASA). ACTION: Notice of information collection. SUMMARY: The National Aeronautics and Space Administration, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. 3506(c)(2)(A)).

DATES: All comments should be submitted within 30 calendar days from the date of this publication. ADDRESSES: All comments should be addressed to Desk Officer for NASA; Office of Information and Regulatory Affairs; Office of Management and Budget; Room 10236; New Executive Office Building; Washington, DC, 20503. FOR FURTHER INFORMATION CONTACT: Requests for additional information or copies of the information collection instrument(s) and instructions should be directed to Mr. Walter Kit, NASA PRA Officer, NASA Headquarters, 300 E Street, SW., JE000, Washington, DC 20546,

(202)358-1350, *Walter.Kit-1@nasa.gov.* SUPPLEMENTARY INFORMATION: I. Abstract Gather Web site usability data by a combination of a data collection instruments to be used by Web and product design teams to enhance NASA Web sites and educational products, making them easier to use and more effective for users to access Agency information with the least amount of time, frustration, and effort. II. Method of Collection Usability data is gathered using various methods and resources, including but not limited to candidate screening, user observation, focus groups, questionnaires, and in-person interviews by means of questionnaires on a Web site, e-mail attachments, faxes, telephone, and direct communication. III. Data *Title:* Generic Web Site Usability Information Collections. *OMB Number:* 2700-XXXX. *Type of review:* Generic Collection. *Affected Public:* Individuals or households. *Number of Respondents:* 1800. *Responses Per Respondent:* 1. *Annual Responses:* 600. *Hours Per Response:* 1.5 hours. *Annual Burden Hours:* 900. IV. Request for Comments Comments are invited on:

(1)Whether the proposed collection of information is necessary for the proper performance of the functions of NASA, including whether the information collected has practical utility;

(2)the accuracy of NASA's estimate of the burden (including hours and cost) of the proposed collection of information;

(3)ways to enhance the quality, utility, and clarity of the information to be collected; and

(4)ways to minimize the burden of the collection of information on respondents, including automated collection techniques or the use of other forms of information technology. Comments submitted in response to this notice will be summarized and included in the request for OMB approval of this information collection. They will also become a matter of public record. Gary Cox, Deputy Chief Information Officer (Acting). [FR Doc. E7-1648 Filed 1-31-07; 8:45 am] BILLING CODE 7510-13-P NATIONAL AERONAUTICS AND SPACE ADMINISTRATION [Notice (07-005)] NASA Advisory Council; Science Committee; Science Subcommittees; Meeting AGENCY: National Aeronautics and Space Administration. ACTION: Notice of meeting. SUMMARY: The National Aeronautics and Space Administration

(NASA)announces a meeting of the Science Subcommittees of the NASA Advisory Council (NAC). These Subcommittees report to the Science Committee of the NAC. The Meeting will be held for the purpose of soliciting from the scientific community and other persons scientific and technical information relevant to program planning. DATES: Monday, February 26, 2007, 8 a.m. to 5 p.m. Mountain Standard Time. ADDRESSES: Fiesta Inn Resort, 2100 South Priest Drive, Tempe, AZ 85282. FOR FURTHER INFORMATION CONTACT: Ms. Marian Norris, Science Mission Directorate, NASA Headquarters, Washington, DC 20546,

(202)358-4452, fax

(202)358-4118, or *mnorris@nasa.gov.* SUPPLEMENTARY INFORMATION: The meeting will primarily consist of five separate breakout sessions of the Subcommittees of the NAC Science Committee. The five Subcommittees are: The Astrophysics Subcommittee, the Earth Science Subcommittee, the Heliophysics Subcommittee, the Planetary Sciences Subcommittee, and the Planetary Protection Subcommittee. The breakout sessions will focus on:

(1)Preparation for the next day's Workshop on Science Associated with the Lunar Exploration Architecture;

(2)Program updates from Directors in NASA's Science Mission Directorate;

(3)Topics specific to each Subcommittee; and

(4)An update by the NASA Administrator. Findings and recommendations developed by the Subcommittees during their breakout sessions will be submitted to the Science Committee of the NAC. The meeting will be open to the public up to the seating capacity of the rooms. It is imperative that the meeting be held on this date to accommodate the scheduling priorities of the key participants. Attendees will be requested to sign a visitor's register. Dated: January 26, 2007. P. Diane Rausch, Advisory Committee Management Officer, National Aeronautics and Space Administration. [FR Doc. E7-1642 Filed 1-31-07; 8:45 am] BILLING CODE 7510-13-P NATIONAL AERONAUTICS AND SPACE ADMINISTRATION [Notice 07-004] NASA Advisory Council Workshop on Science Associated With the Lunar Exploration Architecture AGENCY: National Aeronautics and Space Administration. ACTION: Notice of meeting. SUMMARY: The Science Committee of the NASA Advisory Council (the Council) announces a workshop of its Science Subcommittees. The Workshop on Science Associated with the Lunar Exploration Architecture will be held for the purpose of soliciting from the scientific community scientific and technical information relevant to planning the science objectives and activities associated with lunar exploration within the framework of the Vision for Space Exploration. DATES: Tuesday, February 27, 2007, 8 a.m. to 5 p.m., Wednesday, February 28, 2007, 8 a.m. to 8 p.m., Thursday, March 1, 2007, 8 a.m. to 5 p.m., and Friday, March 2, 2007, 8 a.m. to 11 a.m., Mountain Standard Time (MST). Location: Fiesta Inn Resort, 2100 South Priest Drive, Tempe, AZ, 85282. FOR FURTHER INFORMATION CONTACT: Dr. Michael Wargo, Exploration Systems Mission Directorate, NASA Headquarters, Washington, DC 20546,

(202)358-0822 or *michael.wargo@nasa.gov* or Ms. Lisa May, Science Mission Directorate, NASA Headquarters, Washington, DC 20546,

(202)358-2411 or *lisa.may@nasa.gov.* SUPPLEMENTARY INFORMATION: The Workshop will feature plenary sessions by NASA officials on the Lunar Exploration Architecture and by members of the science community on potential science activities and objectives. Following the opening plenary session, the Workshop will break out into meetings of the Astrophysics Subcommittee, Earth Sciences Subcommittee, Heliophysics Subcommittee, Planetary Sciences Subcommittee, and Planetary Protection Subcommittee, and into cross-cutting topical sessions. The breakout sessions will focus on:

(1)Defining the key objectives of science associated with, or enabled by, lunar exploration;

(2)Discussing implementation to achieve the objectives;

(3)Prioritizing objectives within the framework of the emerging lunar architecture. The overall objective of the Workshop is to provide input from the scientific community through the Advisory Council to NASA regarding recommendations for science associated with the return to the Moon. The Workshop will be open to the public and scientific community up to the seating capacity of the rooms. A poster session will be organized for the presentation of contributed white papers, on Wednesday evening, February 28, 2007. Information concerning all aspects of the Workshop can be found online at: *https://www.infonetic.com/tis/lea/.* Findings and recommendations developed by the Subcommittees during the Workshop will be submitted to the Science Committee of the NASA Advisory Council and, subsequently, to the Council as a whole for possible deliberation on recommendations to NASA regarding planning and implementation of its Lunar Exploration Architecture and related science programs. Dated: January 26, 2007. P. Diane Rausch, Advisory Committee Management Officer, National Aeronautics and Space Administration. [FR Doc. E7-1649 Filed 1-31-07; 8:45 am] BILLING CODE 7510-13-P NATIONAL ARCHIVES AND RECORDS ADMINISTRATION Records Schedules; Availability and Request for Comments AGENCY: National Archives and Records Administration (NARA). ACTION: Notice of availability of proposed records schedules; request for comments. SUMMARY: The National Archives and Records Administration

(NARA)publishes notice at least once monthly of certain Federal agency requests for records disposition authority (records schedules). Once approved by NARA, records schedules provide mandatory instructions on what happens to records when no longer needed for current Government business. They authorize the preservation of records of continuing value in the National Archives of the United States and the destruction, after a specified period, of records lacking administrative, legal, research, or other value. Notice is published for records schedules in which agencies propose to destroy records not previously authorized for disposal or reduce the retention period of records already authorized for disposal. NARA invites public comments on such records schedules, as required by 44 U.S.C. 3303a(a). DATES: Requests for copies must be received in writing on or before March 5, 2007. (Note that the new time period for requesting copies has changed from 45 to 30 days after publication). Once the appraisal of the records is completed, NARA will send a copy of the schedule. NARA staff usually prepare appraisal memorandums that contain additional information concerning the records covered by a proposed schedule. These, too, may be requested and will be provided once the appraisal is completed. Requesters will be given 30 days to submit comments. ADDRESSES: You may request a copy of any records schedule identified in this notice by contacting the Life Cycle Management Division

(NWML)using one of the following means: *Mail:* NARA (NWML), 8601 Adelphi Road, College Park, MD 20740-6001. *E-mail:* *requestschedule@nara.gov* . *FAX:* 301-837-3698. Requesters must cite the control number, which appears in parentheses after the name of the agency which submitted the schedule, and must provide a mailing address. Those who desire appraisal reports should so indicate in their request. FOR FURTHER INFORMATION CONTACT: Laurence Brewer, Director, Life Cycle Management Division (NWML), National Archives and Records Administration, 8601 Adelphi Road, College Park, MD 20740-6001. *Telephone:* 301-837-1539. *E-mail:* *records.mgt@nara.gov* . SUPPLEMENTARY INFORMATION: Each year Federal agencies create billions of records on paper, film, magnetic tape, and other media. To control this accumulation, agency records managers prepare schedules proposing retention periods for records and submit these schedules for NARA's approval, using the Standard Form

(SF)115, Request for Records Disposition Authority. These schedules provide for the timely transfer into the National Archives of historically valuable records and authorize the disposal of all other records after the agency no longer needs them to conduct its business. Some schedules are comprehensive and cover all the records of an agency or one of its major subdivisions. Most schedules, however, cover records of only one office or program or a few series of records. Many of these update previously approved schedules, and some include records proposed as permanent. No Federal records are authorized for destruction without the approval of the Archivist of the United States. This approval is granted only after a thorough consideration of their administrative use by the agency of origin, the rights of the Government and of private persons directly affected by the Government's activities, and whether or not they have historical or other value. Besides identifying the Federal agencies and any subdivisions requesting disposition authority, this public notice lists the organizational unit(s) accumulating the records or indicates agency-wide applicability in the case of schedules that cover records that may be accumulated throughout an agency. This notice provides the control number assigned to each schedule, the total number of schedule items, and the number of temporary items (the records proposed for destruction). It also includes a brief description of the temporary records. The records schedule itself contains a full description of the records at the file unit level as well as their disposition. If NARA staff has prepared an appraisal memorandum for the schedule, it too includes information about the records. Further information about the disposition process is available on request. *SCHEDULES PENDING (Note that the new time period for requesting copies has changed from 45 to 30 days after publication):* 1. Department of Agriculture, Cooperative State Research, Education, and Extension Service (N1-540-07-2, 9 items, 9 temporary items). Records relating to invention reporting and patent application, peer panel administration, and routine staff meetings. This schedule authorizes the agency to apply the proposed disposition instructions to any recordkeeping medium. 2. Department of the Army, Agency-wide, (N1-AU-06-8, 3 items, 1 temporary item). System outputs and reports associated with an electronic information system used to track basic human resources information from multiple sources. Data includes names, social security numbers, addresses, promotions, and assignments. The electronic data in this system and related documentation are proposed for permanent retention. 3. Department of the Army, Agency-wide (N1-AU-07-2, 1 item, 1 temporary item). Records relating to individual retiree compensation for combat-related injury or illness. Included are applications, claim forms, physician's reports, Veteran's Administration Disability Rating Decisions, Line of Duty Investigations, and Army Reserves retirement point summaries. This schedule authorizes the agency to apply the proposed disposition instructions to any recordkeeping medium. 4. Department of the Army, Agency-wide (N1-AU-07-7, 4 items, 4 temporary items). Records used to control and manage aircraft, aviation-associated equipment, mission related equipment, and aircraft maintenance. Included are aircraft maintenance registers, parts and equipment exchange tags, preventive maintenance schedules, and ground support equipment maintenance files. This schedule authorizes the agency to apply the proposed disposition instructions to any recordkeeping medium. 5. Department of Commerce, United States Patent and Trademark Office (N1-241-06-1, 2 items, 2 temporary items). Records associated with employee examinations, including test materials, results, rosters, and confidentiality agreements. 6. Department of Commerce, United States Patent and Trademark Office (N1-241-06-2, 4 items, 2 temporary items). Records include trademark case file feeder records, indexes related to the feeder records, and general administrative and short-term subject files associated with data entry, tracking of work production, and extra copies of materials found elsewhere in this records schedule. Proposed for permanent retention are recordkeeping copies of trademark program and policy subject files, and trademark case files and related indexes. This schedule authorizes the agency to apply the proposed disposition instructions to any recordkeeping medium. 7. Department of Defense, Office of the Secretary of Defense (N1-330-06-2, 3 items, 2 temporary items). Master files and outputs associated with an electronic information system used to track changes to the Defense Federal Acquisition Regulation. Data includes workflow tracking data, general comments, meeting notes, discussions, and routine reports. System electronic case files are proposed for permanent retention. 8. Department of Defense, National Geospatial-Intelligence Agency (N1-537-05-2, 13 items, 7 temporary items). Finished intelligence reports and products, briefings, special collections, and imagery derived products maintained by offices other than the office of primary responsibility. Proposed for permanent retention are recordkeeping copies of finished intelligence reports and products, briefings, special collections, and imagery derived products. This schedule authorizes the agency to apply the proposed disposition instructions to any recordkeeping medium. 9. Department of Homeland Security, Transportation Security Administration (N1-560-04-12, 12 items, 10 temporary items). Records of the Office of Intelligence including inputs, outputs, master files, and documentation associated with electronic information systems used to identify information about known or suspected threats to modes of transportation; routine case files; working files; watch logs; published intelligence reports and assessments; and circulars. Proposed for permanent retention are recordkeeping copies of significant case files and briefings, speeches, addresses, and comments. 10. Department of Justice, Federal Bureau of Investigation (N1-65-07-5, 1 item, 1 temporary item). In accordance with the provisions of schedule N1-65-88-3, the agency requests authority to destroy, under a Federal Pre-Trial Diversion Program court order, case number 288A-CO-26047, which pertains to the investigation of the captioned individual. 11. Department of the Treasury, Office of the Comptroller of the Currency (N1-101-07-3, 3 items, 3 temporary items). Records relating to Web site operations including manuals, user logs, user statistics, reports, and content tracking records. 12. Environmental Protection Agency, Region 5 (N1-412-06-1, 7 items, 2 temporary items). FOIA request files and Web site snapshot maintained by EPA Region 5 Water Division's Crandon Project Team. Proposed for permanent retention are recordkeeping copies of Crandon Project Team Coordinator subject files, Crandon Mining Company applications and submissions, records of the Waste Management Permit Branch, Wisconsin Division of Natural Resources reports and studies, and hydrological data on related watersheds. 13. Environmental Protection Agency, Agency-wide (N1-412-07-15, 2 items, 1 temporary item). This schedule authorizes the agency to apply the existing disposition instructions to record series regardless of recordkeeping medium. The records include compliance monitoring and enforcement for controlling toxic substances files. Paper recordkeeping copies of these files were previously approved for disposal. Also included are records relating to enforcement of toxic substances statutes, regulations and standards, for which paper recordkeeping copies previously were approved as permanent. 14. Environmental Protection Agency, Agency-wide (N1-412-07-16, 4 items, 3 temporary items). This schedule authorizes the agency to apply the existing disposition instructions to several record series regardless of recordkeeping medium. The records include documents and letters relating to the development of air and water standards, including submission, progress, and status of clean air standards being enacted into law by states and territories and submitted to EPA for review and approval. Paper recordkeeping copies of these files were previously approved for disposal. Also included are the following records for which paper recordkeeping copies were previously approved as permanent: water standards documents pertaining to the waterways within and bordered by the states and industries within the states, activities relative to the permit program, development of state clean water acts, and enforcement cases. 15. Environmental Protection Agency, Agency-wide (N1-412-07-17, 2 items, 1 temporary item). This schedule authorizes the agency to apply the existing disposition instructions to records series regardless of the recordkeeping medium. The records include documents relating to the interim program for controlling air pollutants. Paper recordkeeping copies of these files were previously approved for disposal. Also included are files relating to the enforcement of industrial and municipal compliance with clean air regulations and standards, for which paper recordkeeping copies previously were approved as permanent. 16. Environmental Protection Agency, Agency-wide (N1-412-07-19, 2 items, 1 temporary item). This schedule authorizes the agency to apply the existing disposition instructions to records series regardless of the recordkeeping medium. The records include documents and data relating to statements of program, guidance, policies, strategies, analysis of state laws, interim and final authorities and statements of Attorney General. Paper recordkeeping copies of these files were previously approved for disposal. Also included are records relating to the enforcement of hazardous waste statutes, regulations, and standards, for which paper recordkeeping copies previously were approved as permanent. 17. Environmental Protection Agency, Agency-wide (N1-412-07-20, 1 item, 1 temporary item). This schedule authorizes the agency to apply the existing disposition instructions to a series of records regardless of the recordkeeping medium. The records include documents and data relating to the control of emissions from automobile engines. Paper recordkeeping copies of these files were previously approved for disposal. 18. Environmental Protection Agency, Agency-wide (N1-412-07-21, 10 items, 10 temporary items). This schedule authorizes the agency to apply the existing disposition instructions to a number of records series regardless of the recordkeeping medium. The records include criminal enforcement counsel files, pesticide program enforcement files, emission control program files, motor vehicle files, and motor vehicle import declaration files. Paper recordkeeping copies of these files were previously approved for disposal. 19. Environmental Protection Agency, Agency-wide (N1-412-07-22, 3 items, 3 temporary items). This schedule authorizes the agency to apply the existing disposition instructions to a number of records series regardless of the recordkeeping medium. The records include sampling and analytical data files, rapid tax amortization files and permit appeal files. Paper recordkeeping copies of these files were previously approved for disposal. 20. National Archives and Records Administration, Government-wide (N1-GRS-07-1, 5 items, 4 temporary items). Revision of General Records Schedule 26 establishing a fixed age of destruction for files of advisory commissions, committees, councils, boards, and other groups established under the Federal Advisory Committee Act that relate to day-to-day activities and/or do not contain unique information of historical value. This schedule also revises the retention guidance for Web site records. Proposed for permanent retention are files documenting the establishment, membership, policy, organization, deliberations, findings, and recommendations of commissions and other groups established under the Federal Advisory Committee Act. Dated: January 25, 2007. Michael J. Kurtz, Assistant Archivist for Records Services, Washington, DC. [FR Doc. E7-1607 Filed 1-31-07; 8:45 am] BILLING CODE 7515-01-P NUCLEAR REGULATORY COMMISSION [Docket No. 50-186] In the Matter of the Curators of the University of Missouri, The University of Missouri Research Reactor; Order Modifying Emergency Plan Requirements I The Curators of the University of Missouri (the Licensee) hold Amended Facility License No. R-103 issued by the U.S. Nuclear Regulatory Commission (NRC or the Commission) pursuant to Title 10, Part 50, “Domestic Licensing of Production and Utilization Facilities” (10 CFR part 50), and Broad Scope Materials License No. 24-00513-39 issued by the NRC pursuant to 10 CFR part 30, “Rules of General Applicability to Domestic Licensing of Byproduct Material.” Amended Facility License No. R-103 authorizes the operation of the University of Missouri Research Reactor (MURR or the facility) in accordance with conditions specified therein. Broad Scope Materials License No. 24-00513-39 authorizes the possession and use of various byproduct, special nuclear, and source material at the Licensee's facility. The facility is located on the Licensee's campus in Columbia, Missouri. II On March 19 and April 5, 1990, the NRC staff issued two license amendments applicable to the Licensee's Special Nuclear Material and Source Material License No. SNM-247. At the request of the Licensee, the NRC terminated Special Nuclear Material and Source Material License No. SNM-247 on July 7, 1993. On that day, the Commission included the special nuclear materials that were listed on Special Nuclear Material and Source Material License No. SNM-247 in the University's newly issued Broad Scope Materials License No. 24-00513-39. The amendments collectively authorized the Licensee to possess and use certain specified quantities of uranium (depleted in U-235), neptunium-237, americium-241, plutonium-239, and plutonium-240. The Licensee's purpose in requesting the amendments was to conduct research related to the Transuranic Management by Pyropartitioning Separation (TRUMP-S) Research Project. The Licensee carried out this research in the Alpha laboratory at the MURR. Three organizations and 10 individuals filed motions to intervene and requests for hearing on the license amendments. In response to the intervenors' filings, the Commission appointed a Presiding Officer to conduct an informal hearing pursuant to Subpart L, “Informal Hearing Procedures for NRC Adjudications” of the Commission's procedural regulations in 10 CFR part 2, “Rules of Practice for Domestic Licensing Proceedings and Issuance of Orders.” The Presiding Officer issued a First Initial Decision on April 5, 1991, followed by a Final Initial Decision on July 10, 1991. The Licensee and the intervenors appealed various aspects of the proceeding and decisions of the Presiding Officer and the Commission to the Commission. In response, the Commission issued Memorandum and Order, CLI-95-01, dated February 28, 1995; Memorandum and Order, CLI-95-08, (Petitions for Reconsideration), dated June 22, 1995; Memorandum and Order, CLI-95-11, (Petition for Partial Reconsideration), dated August 22, 1995; and Memorandum and Order, CLI-95-17, (Petition for Reconsideration), dated December 14, 1995. The first three of these memoranda and orders required the Licensee to make changes to the MURR Emergency Plan (EP). The MURR EP was changed because the material, while under a NRC broad scope materials license, was being used in the Alpha Laboratory at MURR. In response to the memoranda and orders, the Licensee submitted proposed changes to the EP on December 20, 1995, as supplemented on May 1, 1996. The NRC staff reviewed the Licensee's proposed changes to the EP and, in a letter to the Licensee dated June 20, 1996, concluded that the proposed changes to the EP met the intent of the Commission's memoranda and orders and were acceptable as written. III By letter dated March 31, 2004, the Licensee requested changes to the EP to remove the requirements added to it by the Commission's memoranda and orders related to the TRUMP-S Research Project. The Licensee also requested the recision of the Commission's memoranda and orders requiring changes to the EP. The Licensee completed experiments at the MURR related to the TRUMP-S Research Project on September 30, 1997. By July 20, 1998, the Licensee had shipped all low-level waste from the project and completed final verification surveys documenting the decommissioning of the Alpha Laboratory. All transuranic waste (americium, neptunium, and plutonium) was shipped from the MURR to the Waste Isolation Pilot Plant on May 15, 2003. The NRC renewed Broad Scope Materials License No. 24-00513-39, effective December 22, 2003, with reduced possession limits for the radioisotope types associated with the TRUMP-S Research Project. The renewed license possession limits allow no radioisotope quantities in excess of the quantities listed in 10 CFR 30.72 Schedule C, “Quantities of Radioactive Materials Requiring Consideration of the Need for an Emergency Plan for Responding to a Release.” The NRC staff reviewed the Licensee's proposed changes to the EP and concluded that they will not decrease the effectiveness of the EP and are therefore acceptable. IV Accordingly, pursuant to Sections 104c, 161b and 161i of the Atomic Energy Act of 1954, as amended, and the Commission's regulations in 10 CFR part 50, *it is hereby ordered that:* The changes to the University of Missouri Research Reactor Emergency Plan imposed by Commission-issued Memoranda and Orders CLI-95-01 dated February 28, 1995; CLI-95-08 dated June 22, 1995; and CLI-95-11 dated August 22, 1995, are hereby deleted and the changes to the Emergency Plan for the University of Missouri Research Reactor in the Licensee's letter of March 31, 2004, are approved. V Pursuant to the Atomic Energy Act of 1954, as amended, the licensee or any other person adversely affected by this Order may request a hearing within 30 days of the date of publication of this Order in the **Federal Register** . A request for a hearing or a petition for leave to intervene must be filed

(1)By first class mail addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemaking and Adjudications Staff, or

(2)by courier, express mail, or expedited delivery services to the Office of the Secretary, Sixteenth Floor, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852, Attention: Rulemaking and Adjudications Staff. Because of continuing disruptions in delivery of mail to U.S. Government offices, it is requested that requests for hearing should also be transmitted to the Secretary of the Commission either by e-mail addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, *HEARINGDOCKET@nrc.gov* , or by facsimile transmission addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC, Attention: Rulemakings and Adjudications Staff at 301-415-1101 (the verification number is 301-415-1966). A copy of the request for hearing and petition for leave to intervene must also be sent to the Director, Office of Nuclear Reactor Regulation and to the Assistant General Counsel for Operating Reactors and High Level Waste Programs, Office of the General Counsel, with both copies addressed to the U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. The NRC further requests that copies be transmitted either by facsimile transmission to 301-415-3725 or by e-mail to *OGCMAILCENTER@nrc.gov.* If a person other than the Licensee requests a hearing, he or she shall set forth with particularity the manner in which his or her interest is adversely affected by this Order and shall address the criteria set forth in 10 CFR 2.309, “Hearing Requests, Petitions to Intervene, Requirements for Standing, and Contentions.” If a hearing is requested by the Licensee or a person whose interest is adversely affected, the Commission will issue an order designating the time and place of any hearing. If a hearing is held, the issue to be considered at such hearing shall be whether this Order should be sustained. In the absence of any request for a hearing or written approval of an extension of time in which to request a hearing, the provisions specified in Section IV above shall be effective and final 30 days from the date of publication of this Order in the **Federal Register** without further order or proceedings. If an extension of time for requesting a hearing has been approved, the provisions specified in Section IV shall be final when the extension expires if a hearing request has not been received. In accordance with 10 CFR 51.10(d), this Order is not subject to Section 102(2) of the National Environmental Policy Act, as amended. The NRC staff notes, however, that with respect to environmental impacts associated with the changes imposed by this Order as described in the safety evaluation, the changes would, if imposed by other than an Order, meet the definition of a categorical exclusion in accordance with 10 CFR 51.22(c)(14)(v). Thus, pursuant to either 10 CFR 51.10(d) or 10 CFR 51.22(c)(14)(v), neither an environmental assessment nor an environmental impact statement is required. For further information, see the application from the Licensee dated March 31, 2004 (Agencywide Documents Access Management System (ADAMS) Accession No. ML041040772), available for public inspection at the Commission's Public Document Room (PDR), located at One White Flint North, Public File Area O1 F21, 11555 Rockville Pike (first floor), Rockville, MD. Publicly available records will be accessible electronically from the ADAMS Public Electronic Reading Room on the Internet at the NRC Web site, *http://www.nrc.gov/reading-rm/adams.thml.* Persons who do not have access to ADAMS or who have problems in accessing the documents in ADAMS should contact the NRC PDR reference staff by telephone at 1-800-397-4209 or 301-415-4737 or by e-mail to *PDR@nrc.gov.* Dated this 26th day of January 2007. For the U.S. Nuclear Regulatory Commission. Michael J. Case, Director, Division of Policy and Rulemaking, Office of Nuclear Reactor Regulations. [FR Doc. E7-1633 Filed 1-31-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION [Docket No. 040-00341] Notice of Consideration of Amendment Request for Decommissioning of the Defense Logistics Agency, Hammond Depot, Hammond, IN and Opportunity to Request a Hearing AGENCY: Nuclear Regulatory Commission. ACTION: Notice of amendment request and opportunity to request a hearing. DATES: A request for a hearing must be filed by April 2, 2007. FOR FURTHER INFORMATION CONTACT: Betsy Ullrich, Senior Health Physicist, Commercial and R&D Branch, Division of Nuclear Materials Safety, Region I, U.S. Nuclear Regulatory Commission, King of Prussia, PA 19406. *Telephone:*

(610)337-5040; *fax number:*

(610)337-5269; or *e-mail: exu@nrc.gov.* SUPPLEMENTARY INFORMATION: I. Introduction The Nuclear Regulatory Commission

(NRC)is considering issuance of a license amendment to Source Material License No. STC-133 issued to the Defense Logistics Agency (the Licensee), to authorize decommissioning of its Hammond Depot (the Facility) in Hammond, Indiana under the Licensee's Decommissioning Plan (DP). An NRC administrative review, documented in a letter to the Defense Logistics Agency dated October 19, 2006, found the DP acceptable to begin a technical review. If the NRC approves the DP, the approval will be documented in an amendment to NRC License No. STC-133. However, before approving the proposed amendment, the NRC will need to make the findings required by the Atomic Energy Act of 1954, as amended, and NRC's regulations. These findings will be documented in a Safety Evaluation Report and an Environmental Assessment and/or an Environmental Impact Statement. The license will be amended to authorize release of the Facility for unrestricted use if this amendment is approved following completion of decommissioning activities and verification by the NRC that the radiological criteria for license termination have been met. II. Opportunity to Request a Hearing The NRC hereby provides notice that this is a proceeding on an application for a license amendment regarding decommissioning of the Facility located in Hammond, Indiana. In accordance with the general requirements in subpart C of 10 CFR part 2, as amended on January 14, 2004 (69 FR 2182), any person whose interest may be affected by this proceeding and who desires to participate as a party must file a written request for a hearing and a specification of the contentions which the person seeks to have litigated in the hearing. In accordance with 10 CFR 2.302(a), a request for a hearing must be filed with the Commission either by: 1. *First class mail addressed to:* Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemakings and Adjudications Staff; 2. *Courier, express mail, and expedited delivery services:* Office of the Secretary, Sixteenth Floor, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852, *Attention:* Rulemakings and Adjudications Staff, between 7:45 a.m. and 4:15 p.m., Federal workdays; 3. E-mail addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, *HEARINGDOCKET@NRC.GOV;* or 4. By facsimile transmission addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC, *Attention:* Rulemakings and Adjudications Staff, at

(301)415-1101; verification number is

(301)415-1966. In accordance with 10 CFR 2.302(b), all documents offered for filing must be accompanied by proof of service on all parties to the proceeding or their attorneys of record as required by law or by rule or order of the Commission, including: 1. The applicant, Defense Logistics Agency, Defense National Stockpile Center, 8725 John J. Kingman Road, Suite 3229, Fort Belvoir, Virginia, 22060-6223, Attention: Michael Pecullan, Radiation Safety Officer; and 2. The NRC staff, by delivery to the Office of the General Counsel, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852, or by mail addressed to the Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. Hearing requests should also be transmitted to the Office of the General Counsel, either by means of facsimile transmission to

(301)415-3725, or by e-mail to *ogcmailcenter@nrc.gov.* The formal requirements for documents contained in 10 CFR 2.304 (b), (c), (d), and (e), must be met. In accordance with 10 CFR 2.304(f), a document filed by electronic mail or facsimile transmission need not comply with the formal requirements of 10 CFR 2.304 (b), (c), and (d), as long as an original and two

(2)copies otherwise complying with all of the requirements of 10 CFR 2.304 (b), (c), and

(d)are mailed within two

(2)days thereafter to the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, *Attention:* Rulemakings and Adjudications Staff. In accordance with 10 CFR 2.309(b), a request for a hearing must be filed by April 2, 2007. In addition to meeting other applicable requirements of 10 CFR 2.309, the general requirements involving a request for a hearing filed by a person other than an applicant must state: 1. The name, address, and telephone number of the requester; 2. The nature of the requester's right under the Act to be made a party to the proceeding; 3. The nature and extent of the requester's property, financial or other interest in the proceeding; 4. The possible effect of any decision or order that may be issued in the proceeding on the requester's interest; and 5. The circumstances establishing that the request for a hearing is timely in accordance with 10 CFR 2.309(b). In accordance with 10 CFR 2.309 (f)(1), a request for hearing or petitions for leave to intervene must set forth with particularity the contentions sought to be raised. For each contention, the request or petition must: 1. Provide a specific statement of the issue of law or fact to be raised or controverted; 2. Provide a brief explanation of the basis for the contention; 3. Demonstrate that the issue raised in the contention is within the scope of the proceeding; 4. Demonstrate that the issue raised in the contention is material to the findings that the NRC must make to support the action that is involved in the proceeding; 5. Provide a concise statement of the alleged facts or expert opinions which support the requester's/petitioner's position on the issue and on which the requester/petitioner intends to rely to support its position on the issue; and 6. Provide sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. This information must include references to specific portions of the application (including the applicant's environmental report and safety report) that the requester/petitioner disputes and the supporting reasons for each dispute, or, if the requester/petitioner believes the application fails to contain information on a relevant matter as required by law, the identification of each failure and the supporting reasons for the requester's/petitioner's belief. In addition, in accordance with 10 CFR 2.309(f)(2), contentions must be based on documents or other information available at the time the petition is to be filed, such as the application, supporting safety analysis report, environmental report or other supporting document filed by an applicant or licensee, or otherwise available to the petitioner. On issues arising under the National Environmental Policy Act, the requester/petitioner shall file contentions based on the applicant's environmental report. The requester/petitioner may amend those contentions or file new contentions if there are data or conclusions in the NRC draft, or final environmental impact statement, environmental assessment, or any supplements relating thereto, that differ significantly from the data or conclusions in the applicant's documents. Otherwise, contentions may be amended or new contentions filed after the initial filing only with leave of the presiding officer. Each contention shall be given a separate numeric or alpha designation within one of the following groups: 1. Technical—primarily concerns issues relating to matters discussed or referenced in the Safety Evaluation Report for the proposed action. 2. Environmental—primarily concerns issues relating to matters discussed or referenced in the Environmental Report for the proposed action. 3. Emergency Planning—primarily concerns issues relating to matters discussed or referenced in the Emergency Plan as it relates to the proposed action. 4. Physical Security—primarily concerns issues relating to matters discussed or referenced in the Physical Security Plan as it relates to the proposed action. 5. Miscellaneous—does not fall into one of the categories outlined above. If the requester/petitioner believes a contention raises issues that cannot be classified as primarily falling into one of these categories, the requester/petitioner must set forth the contention and supporting basis, in full, separately for each category into which the requester/petitioner asserts the contention belongs with a separate designation for that category. Requesters/petitioners should, when possible, consult with each other in preparing contentions and combine similar subject matter concerns into a joint contention, for which one of the co-sponsoring requesters/petitioners is designated the lead representative. Further, in accordance with 10 CFR 2.309(f)(3), any requester/petitioner that wishes to adopt a contention proposed by another requester/petitioner must do so in writing within ten days of the date the contention is filed, and designate a representative who shall have the authority to act for the requester/petitioner. In accordance with 10 CFR 2.309(g), a request for hearing and/or petition for leave to intervene may also address the selection of the hearing procedures, taking into account the provisions of 10 CFR 2.310. III. Further Information Documents related to this action, including the application for amendment and supporting documentation, are available electronically at the NRC's Electronic Reading Room at *http://www.nrc.gov/reading-rm/adams.html.* From this site, you can access the NRC's Agencywide Document Access and Management System (ADAMS), which provides text and image files of NRC's public documents. The ADAMS accession numbers for the documents related to this notice are: Submittal Letter dated February 3, 2006 ML060580094 Historical Site Assessment dated August 2005 ML060580605 Preliminary Site Specific Derived Concentration Guidelines ML060580605 Radiological Scoping Survey dated December 2005 ML060580608 Environmental Assessment, Disposition of Thorium Nitrate ML060580592 Request for Additional Information dated June 8, 2006 ML061640494 Deficiency Response Letter dated July 5, 2006 ML061870578 Deficiency Response Letter dated July 19, 2006 ML062070231 Deficiency Response Letter dated September 19, 2006 ML062710160 Radiological Characterization Survey dated August 2006 ML062710179 Decommissioning/Remediation Plan dated September 2006 ML062760618 Receipt of Decommissioning Plan Letter dated October 19, 2006 ML062930051 If you do not have access to ADAMS or if there are problems in accessing the documents located in ADAMS, contact the NRC Public Document Room

(610)337-5399; *fax number:*

(610)337-5269; or *e-mail: sth2@nrc.gov* . SUPPLEMENTARY INFORMATION: I. Introduction The Nuclear Regulatory Commission

(NRC)is considering issuance of a license amendment to Source Material License No. STC-133 issued to the Defense Logistics Agency (the Licensee), to authorize decommissioning of its Curtis Bay Depot (the Facility) in Baltimore, Maryland under the Licensee's Decommissioning Plan (DP). An NRC administrative review, documented in a letter to the Defense Logistics Agency dated October 19, 2006, found the DP acceptable to begin a technical review. If the NRC approves the DP, the approval will be documented in an amendment to NRC License No. STC-133. However, before approving the proposed amendment, the NRC will need to make the findings required by the Atomic Energy Act of 1954, as amended, and NRC's regulations. These findings will be documented in a Safety Evaluation Report and an Environmental Assessment and/or an Environmental Impact Statement. The license will be amended to authorize release of the Facility for unrestricted use if this amendment is approved following completion of decommissioning activities and verification by the NRC that the radiological criteria for license termination have been met. II. Opportunity To Request a Hearing The NRC hereby provides notice that this is a proceeding on an application for a license amendment regarding decommissioning of the Facility located in Baltimore, Maryland. In accordance with the general requirements in subpart C of 10 CFR part 2, as amended on January 14, 2004 (69 FR 2182), any person whose interest may be affected by this proceeding and who desires to participate as a party must file a written request for a hearing and a specification of the contentions which the person seeks to have litigated in the hearing. In accordance with 10 CFR 2.302(a), a request for a hearing must be filed with the Commission either by: 1. *First class mail addressed to:* Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, *Attention:* Rulemakings and Adjudications Staff; 2. *Courier, express mail, and expedited delivery services:* Office of the Secretary, Sixteenth Floor, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852, Attention: Rulemakings and Adjudications Staff, between 7:45 a.m. and 4:15 p.m., Federal workdays; 3. E-mail addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, *HEARINGDOCKET@NRC.GOV* ; or 4. By facsimile transmission addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC, Attention: Rulemakings and Adjudications Staff, at

(301)415-1101; verification number is

(301)415-1966. In accordance with 10 CFR 2.302(b), all documents offered for filing must be accompanied by proof of service on all parties to the proceeding or their attorneys of record as required by law or by rule or order of the Commission, including: 1. The applicant, Defense Logistics Agency, Defense National Stockpile Center, 8725 John J. Kingman Road, Suite 3229, Fort Belvoir, Virginia 22060-6223, Attention: Michael Pecullan, Radiation Safety Officer; and 2. The NRC staff, by delivery to the Office of the General Counsel, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852, or by mail addressed to the Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. Hearing requests should also be transmitted to the Office of the General Counsel, either by means of facsimile transmission to

(301)415-3725, or by e-mail to *ogcmailcenter@nrc.gov* . The formal requirements for documents contained in 10 CFR 2.304 (b), (c), (d), and (e), must be met. In accordance with 10 CFR 2.304(f), a document filed by electronic mail or facsimile transmission need not comply with the formal requirements of 10 CFR 2.304 (b), (c), and (d), as long as an original and two

(2)copies otherwise complying with all of the requirements of 10 CFR 2.304 (b), (c), and

(d)are mailed within two

(2)days thereafter to the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemakings and Adjudications Staff. In accordance with 10 CFR 2.309(b), a request for a hearing must be filed by April 2, 2007. In addition to meeting other applicable requirements of 10 CFR 2.309, the general requirements involving a request for a hearing filed by a person other than an applicant must state: 1. The name, address, and telephone number of the requester; 2. The nature of the requester's right under the Act to be made a party to the proceeding; 3. The nature and extent of the requester's property, financial or other interest in the proceeding; 4. The possible effect of any decision or order that may be issued in the proceeding on the requester's interest; and 5. The circumstances establishing that the request for a hearing is timely in accordance with 10 CFR 2.309(b). In accordance with 10 CFR 2.309(f)(1), a request for hearing or petitions for leave to intervene must set forth with particularity the contentions sought to be raised. For each contention, the request or petition must: 1. Provide a specific statement of the issue of law or fact to be raised or controverted; 2. Provide a brief explanation of the basis for the contention; 3. Demonstrate that the issue raised in the contention is within the scope of the proceeding; 4. Demonstrate that the issue raised in the contention is material to the findings that the NRC must make to support the action that is involved in the proceeding; 5. Provide a concise statement of the alleged facts or expert opinions which support the requester's/petitioner's position on the issue and on which the requester/petitioner intends to rely to support its position on the issue; and 6. Provide sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. This information must include references to specific portions of the application (including the applicant's environmental report and safety report) that the requester/petitioner disputes and the supporting reasons for each dispute, or, if the requester/petitioner believes the application fails to contain information on a relevant matter as required by law, the identification of each failure and the supporting reasons for the requester's/petitioner's belief. In addition, in accordance with 10 CFR 2.309(f)(2), contentions must be based on documents or other information available at the time the petition is to be filed, such as the application, supporting safety analysis report, environmental report or other supporting document filed by an applicant or licensee, or otherwise available to the petitioner. On issues arising under the National Environmental Policy Act, the requester/petitioner shall file contentions based on the applicant's environmental report. The requester/petitioner may amend those contentions or file new contentions if there are data or conclusions in the NRC draft, or final environmental impact statement, environmental assessment, or any supplements relating thereto, that differ significantly from the data or conclusions in the applicant's documents. Otherwise, contentions may be amended or new contentions filed after the initial filing only with leave of the presiding officer. Each contention shall be given a separate numeric or alpha designation within one of the following groups: 1. Technical—primarily concerns issues relating to matters discussed or referenced in the Safety Evaluation Report for the proposed action. 2. Environmental—primarily concerns issues relating to matters discussed or referenced in the Environmental Report for the proposed action. 3. Emergency Planning—primarily concerns issues relating to matters discussed or referenced in the Emergency Plan as it relates to the proposed action. 4. Physical Security—primarily concerns issues relating to matters discussed or referenced in the Physical Security Plan as it relates to the proposed action. 5. Miscellaneous—does not fall into one of the categories outlined above. If the requester/petitioner believes a contention raises issues that cannot be classified as primarily falling into one of these categories, the requester/petitioner must set forth the contention and supporting basis, in full, separately for each category into which the requester/petitioner asserts the contention belongs with a separate designation for that category. Requesters/petitioners should, when possible, consult with each other in preparing contentions and combine similar subject matter concerns into a joint contention, for which one of the co-sponsoring requesters/petitioners is designated the lead representative. Further, in accordance with 10 CFR 2.309(f)(3), any requester/petitioner that wishes to adopt a contention proposed by another requester/petitioner must do so in writing within ten days of the date the contention is filed, and designate a representative who shall have the authority to act for the requester/petitioner. In accordance with 10 CFR 2.309(g), a request for hearing and/or petition for leave to intervene may also address the selection of the hearing procedures, taking into account the provisions of 10 CFR 2.310. III. Further Information Documents related to this action, including the application for amendment and supporting documentation, are available electronically at the NRC's Electronic Reading Room at *http://www.nrc.gov/reading-rm/adams.html* . From this site, you can access the NRC's Agencywide Document Access and Management System (ADAMS), which provides text and image files of NRC's public documents. The ADAMS accession numbers for the documents related to this notice are: Submittal Letter dated February 3, 2006 ML060580094 Historical Site Assessment ML060580564 Preliminary Site Specific Derived Concentration Guidelines ML060580566 Radiological Scoping Survey ML060580581 Environmental Assessment, Disposition of Thorium Nitrate ML060580592 Request for Additional Information ML061640494 Deficiency Response Letter dated July 5, 2006 ML061870570 Deficiency Response Letter dated August 8, 2006 ML062290404 Characterization Survey Report ML062650300 Decommissioning/Remediation Plan ML062760618 Receipt of Decommissioning Plan ML062930051 If you do not have access to ADAMS or if there are problems in accessing the documents located in ADAMS, contact the NRC Public Document Room

(NRC)is considering the issuance of a license amendment to Byproduct Materials License No. 29-00040-10. This license is held by Honeywell International, Incorporated (the Licensee), for its facility located at 101 Columbia Road in Morristown, New Jersey (the Facility). Issuance of the amendment would authorize release of the Facility for unrestricted use and termination of the NRC license. The Licensee requested this action in an amendment request dated September 8, 2005. The NRC has prepared an Environmental Assessment

(EA)in support of this proposed action in accordance with the requirements of Title 10, Code of Federal Regulations (CFR), Part 51 (10 CFR part 51). Based on the EA, the NRC has concluded that a Finding of No Significant Impact (FONSI) is appropriate with respect to the proposed action. The amendment will be issued to the Licensee following the publication of this FONSI and EA in the **Federal Register** . II. Environmental Assessment Identification of Proposed Action The proposed action would approve the Licensee's September 8, 2005, license amendment request, resulting in release of the Facility for unrestricted use and the termination of its NRC materials license. License No. 29-00040-10 was issued on August 21, 1973, pursuant to 10 CFR part 30, and has been amended periodically since that time. This license authorized the Licensee to use sealed and unsealed byproduct material for purposes of conducting research and development activities on laboratory bench tops and in hoods. The Facility is situated on 150 acres of land and consists of office buildings, laboratory buildings, and support buildings. The Facility is located in a mixed industrial commercial area with some residential. Within the Facility, use of licensed materials was confined to an area of 1675 square feet within the DEV Building, specifically Laboratories 4, 7, and 8. On September 18, 2003, the Licensee ceased licensed activities and initiated a survey and decontamination of the Facility. Based on the Licensee's historical knowledge of the site and the conditions of the Facility, the Licensee determined that only routine decontamination activities, in accordance with their NRC-approved, operating radiation safety procedures, were required. The Licensee was not required to submit a decommissioning plan to the NRC because worker cleanup activities and procedures are consistent with those approved for routine operations. The Licensee conducted surveys of the Facility and provided information to the NRC to demonstrate that it meets the criteria in Subpart E of 10 CFR part 20 for unrestricted release and for license termination. Need for the Proposed Action The Licensee has ceased conducting licensed activities at the Facility, and seeks the unrestricted use of its Facility and the termination of its NRC materials license. Termination of its license would end the Licensee's obligation to pay annual license fees to the NRC. Environmental Impacts of the Proposed Action The historical review of licensed activities conducted at the Facility shows that such activities involved use of the following unsealed radionuclides with half-lives greater than 120 days: hydrogen-3 and carbon-14. Prior to performing the final status survey, the Licensee conducted decontamination activities, as necessary, in the areas of the Facility affected by these radionuclides. The Licensee conducted a final status survey on October 3, 2006. This survey covered DEV Building, Laboratories 4, 7, and 8. The final status survey report was submitted with the Licensee's letter dated October 24, 2006. The Licensee elected to demonstrate compliance with the radiological criteria for unrestricted release as specified in 10 CFR 20.1402 by using the screening approach described in NUREG-1757, “Consolidated NMSS Decommissioning Guidance,” Volume 2. The Licensee used the radionuclide-specific derived concentration guideline levels (DCGLs), developed there by the NRC, which comply with the dose criterion in 10 CFR 20.1402. These DCGLs define the maximum amount of residual radioactivity on building surfaces, equipment, and materials, and in soils, that will satisfy the NRC requirements in subpart E of 10 CFR part 20 for unrestricted release. The Licensee's final status survey results were below these DCGLs and are in compliance with the As Low As Reasonably Achievable (ALARA) requirement of 10 CFR 20.1402. The NRC thus finds that the Licensee's final status survey results are acceptable. Based on its review, the staff has determined that the affected environment and any environmental impacts associated with the proposed action are bounded by the impacts evaluated by the “Generic Environmental Impact Statement in Support of Rulemaking on Radiological Criteria for License Termination of NRC-Licensed Nuclear Facilities” (NUREG- 1496) Volumes 1-3 (ML042310492, ML042320379, and ML042330385). The staff finds there were no significant environmental impacts from the use of radioactive material at the Facility. The NRC staff reviewed the docket file records and the final status survey report to identify any non-radiological hazards that may have impacted the environment surrounding the Facility. No such hazards or impacts to the environment were identified. The NRC has identified no other radiological or non-radiological activities in the area that could result in cumulative environmental impacts. The NRC staff finds that the proposed release of the Facility for unrestricted use and the termination of the NRC materials license is in compliance with 10 CFR 20.1402. Based on its review, the staff considered the impact of the residual radioactivity at the Facility and concluded that the proposed action will not have a significant effect on the quality of the human environment. Environmental Impacts of the Alternatives to the Proposed Action Due to the largely administrative nature of the proposed action, its environmental impacts are small. Therefore, the only alternative the staff considered is the no-action alternative, under which the staff would leave things as they are by simply denying the amendment request. This no-action alternative is not feasible because it conflicts with 10 CFR 30.36(d) requiring that decommissioning of byproduct material facilities be completed and approved by the NRC after licensed activities cease. The NRC's analysis of the Licensee's final status survey data confirmed that the Facility meets the requirements of 10 CFR 20.1402 for unrestricted and for license termination. Additionally, denying the amendment request would result in no change in current environmental impacts. The environmental impacts of the proposed action and the no-action alternative are therefore similar, and the no-action alternative is accordingly not further considered. Conclusion The NRC staff has concluded that the proposed action is consistent with the NRC's unrestricted release criteria specified in 10 CFR 20.1402. Because the proposed action will not significantly impact the quality of the human environment, the NRC staff concludes that the proposed action is the preferred alternative. Agencies and Persons Consulted NRC provided a draft of this Environmental Assessment to the State of New Jersey's Department of Environmental Safety and Health for review on December 18, 2006. On December 26, 2006, the State of New Jersey responded by letter, agreeing with the conclusions of the EA, and otherwise had no comments. The NRC staff has determined that the proposed action is of a procedural nature, and will not affect listed species or critical habitat. Therefore, no further consultation is required under Section 7 of the Endangered Species Act. The NRC staff has also determined that the proposed action is not the type of activity that has the potential to cause effects on historic properties. Therefore, no further consultation is required under Section 106 of the National Historic Preservation Act. III. Finding of No Significant Impact The NRC staff has prepared this EA in support of the proposed action. On the basis of this EA, the NRC finds that there are no significant environmental impacts from the proposed action, and that preparation of an environmental impact statement is not warranted. Accordingly, the NRC has determined that a Finding of No Significant Impact is appropriate. IV. Further Information Documents related to this action, including the application for license amendment and supporting documentation, are available electronically at the NRC's Electronic Reading Room at *http://www.nrc.gov/reading-rm/adams.html.* From this site, you can access the NRC's Agencywide Document Access and Management System (ADAMS), which provides text and image files of NRC's public documents. The documents related to this action are listed below, along with their ADAMS accession numbers. 1. NUREG-1757, “Consolidated NMSS Decommissioning Guidance;” 2. Title 10 Code of Federal Regulations, Part 20, Subpart E, “Radiological Criteria for License Termination;” 3. Title 10, Code of Federal Regulations, Part 51, “Environmental Protection Regulations for Domestic Licensing and Related Regulatory Functions;” 4. NUREG-1496, “Generic Environmental Impact Statement in Support of Rulemaking on Radiological Criteria for License Termination of NRC-Licensed Nuclear Facilities;” 5. Honeywell International Inc., Termination Request Letter dated September 8, 2005, under cover letter dated August 31, 2005 [ML052590382]; 6. Honeywell International Inc., Deficiency Response Letter dated November 18, 2005 [ML053250525]; 7. Honeywell International Inc., Deficiency Response Letter dated March 13, 2006 [ML060820354]; 8. Honeywell International Inc., Deficiency Response Letter dated October 24, 2006 [ML063050527]; 9. Honeywell International Inc., Deficiency Facsimile dated November 26, 2006 [ML063320313]. If you do not have access to ADAMS, or if there are problems in accessing the documents located in ADAMS, contact the NRC Public Document Room

(PDR)Reference staff at 1-800-397-4209, 301-415-4737, or by e-mail to *pdr@nrc.gov.* These documents may also be viewed electronically on the public computers located at the NRC's PDR, O 1 F21, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852. The PDR reproduction contractor will copy documents for a fee. Dated at Region I, 475 Allendale Road, King of Prussia, PA this 23rd day of January, 2007. For the Nuclear Regulatory Commission. James P. Dwyer, Chief, Commercial and R&D Branch, Division of Nuclear Materials Safety, Region 1. [FR Doc. E7-1645 Filed 1-31-07; 8:45 am] BILLING CODE 7590-01-P SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request *Upon Written Request, Copies Available From:* Securities and Exchange Commission, Office of Filings and Information Services, Washington, DC 20549 *Extension:* Rule 19b-4(e) and Form 19b-4(e), SEC File No. 270-447, OMB Control No. 3235-0504. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ) the Securities and Exchange Commission (“Commission”) intends to submit to the Office of Management and Budget requests for extension of the previously approved collections of information discussed below. The Code of Federal Regulation citation to this collection of information is 17 CFR 240.19b-4(e) under the Securities Exchange Act of 1934 (17 U.S.C. 78a *et seq.* ) (the “Act”). Rule 19b-4(e) permits a self-regulatory organization (“SRO”) to immediately list and trade a new derivative securities product so long as such product is in compliance with the criteria of Rule 19b-4(e) under the Act. However, in order for the Commission to maintain an accurate record of all new derivative securities products traded through the facilities of SROs and to determine whether an SRO has properly availed itself of the permission granted by Rule 19b-4(e), it is necessary that the SRO maintain, on-site, a copy of Form 19b-4(e) under the Act. Rule 19b-4(e) requires SROs to file a summary form, Form 19b-4(e), and thereby notify the Commission, within five business days after the commencement of trading a new derivative securities product. In addition, the Commission reviews SRO compliance with Rule 19b-4(e) through its routine inspections of the SROs. The collection of information is designed to allow the Commission to maintain an accurate record of all new derivative securities products traded through the facilities of SROs and to determine whether an SRO has properly availed itself of the permission granted by Rule 19b-4(e). The respondents to the collection of information are self-regulatory organizations (as defined by the Act), including national securities exchanges and national securities associations. Fourteen respondents file an average total of 50 responses per year, which corresponds to an estimated annual response burden of 50 hours. At an average cost per burden hour of $239.50, the resultant total related cost of compliance for these respondents is $11,975 per year (50 burden hours multiplied by $239.50/hour = $11,975). Compliance with Rule 19b-4(e) is mandatory. Information received in response to Rule 19b-4(e) shall not be kept confidential; the information collected is public information. Written comments are invited on:

(a)Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

(b)the accuracy of the agency's estimate of the burden of the collection of information;

(c)ways to enhance the quality, utility, and clarity of the information collected; and

(a)Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility;

(b)the accuracy of the agency's estimate of the burden of the proposed collection of information;

(c)ways to enhance the quality, utility, and clarity of the information to be collected; and

(d)ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. Direct your written comments to R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312 or send an e-mail to: *PRA_Mailbox@sec.gov* . Comments must be submitted to OMB within 60 days of this notice. Dated: January 24, 2007. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-1583 Filed 1-31-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55162; File No. SR-Amex-2006-106] Self-Regulatory Organizations; American Stock Exchange LLC; Order Granting Approval to Proposed Rule Change as Modified by Amendment No. 1 Thereto, Relating to the Adoption of a Penny Pilot Program January 24, 2007. I. Introduction On November 9, 2006, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 a proposed rule change to permit certain option classes to be quoted in pennies on a pilot basis and to adopt a quote mitigation strategy. The proposed rule change was published for comment in the **Federal Register** on November 20, 2006. 3 The Commission received four comment letters on the proposed rule change. 4 On January 18, 2007, the Exchange filed Amendment No. 1 to the proposed rule change. 5 The Exchange responded to the comment letters on January 19, 2007. 6 This order approves the proposed rule change as modified by Amendment No. 1. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 54741 (November 9, 2006), 71 FR 67176. 4 *See* letters to Nancy M. Morris, Secretary, Commission, from Wayne Jervis, Managing Member of the General Partner, Jervis Alternative Asset Management Co. (“JAAMCO”), dated December 1, 2006 (“JAAMCO Letter”); from Christopher Nagy, Chair, Securities Industry and Financial Markets Association (“SIFMA”) Options Committee, dated December 20, 2006 (“SIFMA Letter”); from Peter J. Bottini, Executive Vice-President, optionsXpress, Inc. (“optionsXpress”), dated November 17, 2006 (“optionsXpress Letter”); and from Patrick Sexton, Associate General Counsel, Chicago Board Options Exchange, Inc. (“CBOE”), dated December 12, 2006 (“CBOE Letter”). 5 Amendment No. 1 proposed to replace Glamis Gold, which was delisted, with Agilent Tech, Inc. in the list of options classes permitted to be quoted in pennies. Amendment No. 1 is technical in nature, and the Commission is not publishing Amendment No. 1 for public comment. 6 *See* letter to Nancy Morris, Secretary, Commission, from Jeffrey P. Burns, Vice President and General Counsel, Amex, dated January 19, 2007. On January 23, 2007, Amex supplemented its initial response by providing additional information about its Holdback Timer. *See* letter to Nancy Morris, Secretary, Commission, from Jeffrey P. Burns, Vice President and General Counsel, Amex, dated January 23, 2007 (collectively “Exchange Response”). II. Description of the Proposal A. Scope of the Penny Pilot Program Amex proposes to amend its rules to permit certain option classes to be quoted in pennies during a six-month pilot (“Penny Pilot Program”), which would commence on January 26, 2007. Specifically, proposed Commentary .01 to Amex Rule 952 would set forth the parameters of the Penny Pilot Program and note that information concerning the Penny Pilot Program will be communicated to members via Regulatory Circular. Currently, all six options exchanges, including Amex, quote options in nickel and dime increments. The minimum price variation for quotations in options series that are quoted at less than $3 per contract is $0.05 and the minimum price variation for quotations in options series that are quoted at $3 per contract or greater is $0.10. Under the Penny Pilot Program, beginning on January 26, 2007, market participants would be able to begin quoting in penny increments in certain series of option classes. The Penny Pilot Program would include the following thirteen options: Ishares Russell 2000 (IWM); NASDAQ-100 Index Tracking Stock (QQQQ); SemiConductor Holders Trust (SMH); General Electric Company (GE); Advanced Micro Devices, Inc. (AMD), Microsoft Corporation (MSFT); Intel Corporation (INTC); Caterpillar, Inc. (CAT); Whole Foods Market, Inc. (WFMI); Texas Instruments, Inc. (TXN); Flextronics International Ltd. (FLEX); Sun Microsystems, Inc. (SUNW); and Agilent Technologies, Inc. (A). The Exchange will communicate the list of options to be included in the Penny Pilot Program to its membership via Regulatory Circular. The minimum price variation for all classes included in the Penny Pilot Program, except for the QQQQs, would be $0.01 for all quotations in option series that are quoted at less than $3 per contract and $0.05 for all quotations in option series that are quoted at $3 per contract or greater. The QQQQs would be quoted in $0.01 increments for all options series. Amex commits to deliver a report to the Commission during the fourth month of the pilot, which would be composed of data from the first three months of trading. The report would analyze the impact of penny pricing on market quality and options system capacity. B. Quote Mitigation Proposal To mitigate quote message traffic, Amex has represented to the Commission that it has already implemented or intends to implement the following quote mitigation strategies. • *Join Quote.* The Amex, through the ANTE system, 7 provides that registered options traders (“ROTs”) may either stream their own quotes or join the specialist's disseminated quotation in some or all of his assigned classes or series (“join quote”). In order to participate in “join quote,” a ROT must be physically present in the trading crowd. The purpose of allowing ROTs to piggyback on specialists' quotes is partly to reduce market data traffic by allowing ROTs to join the specialist's quote in the less actively traded series (far out months, etc.) while auto-quoting the more actively traded series. 7 *See* Securities Exchange Act Release No. 49747 (May 20, 2004), 69 FR 30344 (May 27, 2004) (SR-Amex-2003-89). • *Monitoring.* The Amex actively monitors the quotation activity of its market participants. When the Exchange detects that a market participant is disseminating significantly more quotes than the average market participant, the Exchange contacts the market participant and alerts them to potentially excessive quotation activity. Often such monitoring reveals that the market participant may have internal system issues or has incorrectly set system parameters. Alerting the market participant usually leads to the market participant to take steps to reduce the number of quotes for dissemination. • *Holdback Timers.* The Amex has the systematic ability to limit the dissemination of quotations and other changes to the Amex Best Bid or Offer (“ABBO”) according to prescribed time criteria (“Holdback Timer”). For instance, if there is a change in the price of a security underlying an option, multiple market participants may adjust the price or size of their quotes. Rather than disseminating each individual change, the Holdback Timer permits the Exchange to wait until multiple market participants have adjusted their quotes and then to disseminate a new quotation. This helps to prevent the “flickering” of quotations. The Amex proposes to codify the Holdback Timer in this rule filing. As proposed in Amex Rule 958A-ANTE, the Exchange will utilize a Holdback Timer that delays quotation updates for no longer than one

(1)second. • *Delisting.* The Amex commits to the Commission that it will delist options with an average daily volume (“ADV”) of less than 25 contracts. However, the Amex represented to the Commission that it has been its policy to be much more aggressive in delisting relatively inactive options, thereby eliminating the quotation traffic attendant to such listings. III. Discussion After careful review of the proposal, the comment letters, and the Exchange's response thereto, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 8 In particular, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act, 9 which requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 8 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 9 15 U.S.C. 78f(b)(5). The Commission believes that the implementation of a limited six-month Penny Pilot Program by Amex and the five other options exchanges will provide valuable information to the exchanges, the Commission and others about the impact of penny quoting in the options market. In particular, the Penny Pilot Program will allow analysis of the impact of penny quoting on:

(1)Spreads;

(2)transaction costs;

(3)payment for order flow; and

(4)quote message traffic. The Commission believes that the thirteen options classes to be included in the penny pilot program represent a diverse group of options classes with varied trading characteristics. This diversity should facilitate analyses by the Commission, the options exchanges and others. The Commission also believes that the Penny Pilot Program is sufficiently limited that it is unlikely to increase quote message traffic beyond the capacity of market participants' systems and disrupt the timely receipt of quote information. Nevertheless, because the Commission expects that the Penny Pilot Program will increase quote message traffic, the Commission is also approving the Exchange's proposal to reduce the number of quotations it disseminates. In this regard, the commenters expressed concern about Amex's proposed quote mitigation strategy. 10 In particular, although optionsXpress generally supported Amex's Holdback Timer, it expressed concern that a longer holdback timer period could negatively impact market quality and undermine transparency in the options market. 11 10 JAAMCO did not comment directly on Amex's proposal, but rather stated its strong support for quoting in penny increments in the options market, which it believes will improve inequities in the marketplace. *See* JAAMCO Letter, *supra* note 4. 11 *See* optionsXpress Letter, *supra* note 4. OptionsXpress also stated its view that current problems with the intermarket linkage will be exacerbated in the option classes participating in the Penny Pilot Program. *Id.* In addition, SIFMA recommends that all six of the option exchanges adopt a comprehensive and uniform quote mitigation strategy. 12 In particular, SIFMA strongly supports the adoption of the Holdback Timer mitigation proposal as the most efficient means of reducing quotation traffic. SIFMA, however, expressed concern that the lack of uniformity among the quote mitigation proposals adopted by the exchanges will impose a burden on member firms and cause confusion for market participants, especially retail investors. 12 *See* SIFMA Letter, *supra* note 4. Although SIFMA urges the adoption of a uniform and comprehensive approach to quote mitigation, it does not oppose Amex's quote mitigation proposals. In fact, SIFMA acknowledges that certain of Amex's proposals, such as notifying members whose quote activity suggests systems malfunctions or wrong settings and delisting inactive series can contribute to quote mitigation. SIFMA, however, expressed its belief that these proposals do not go far enough to resolve the industry's concerns regarding systems capacity. The Commission supports efforts to implement a uniform, industry-wide quote mitigation plan. It does not, however, believe such efforts preclude individual exchanges from initiating their own quote mitigation strategies. The Commission does not believe that Amex's proposed quote mitigation strategies will lead to confusion among market participants. Finally, CBOE commented that it did not have a fundamental objection to Amex's use of the Holdback Timer, but sought additional information concerning how the Holdback Timer functions and how orders sent to Amex by CBOE members or by CBOE though linkage might be impacted by the Holdback Timer. 13 Specifically, CBOE requested additional information about the extent to which the Holdback Timer is utilized throughout the day and whether it is used uniformly in all option classes traded on Amex. In response, Amex indicated that it intends to use the Holdback Timer uniformly in all option classes. 14 In addition, the Amex committed to apply the Holdback Timer mechanism throughout the trading day for a period of up to, but no more than, one second. 15 In further response to inquiry from CBOE, the Amex represented that it does not intend to disclose the precise length of the timer to its members, to non-members or to the other exchanges. 16 13 *See* CBOE Letter, *supra* note 4. 14 Telephone conversation between Michael T. Bickford, Senior Vice President, Amex, and Jennifer L. Colihan, Special Counsel, Cyndi N. Rodriguez, Special Counsel, and Johnna B. Dumler, Special Counsel, Division of Market Regulation, Commission, on January 23, 2007. *See also* Exchange Response, *supra* note 6. 15 Telephone conversation between Michael T. Bickford, Senior Vice President, Amex, and Jennifer L. Colihan, Special Counsel, Cyndi N. Rodriguez, Special Counsel, and Johnna B. Dumler, Special Counsel, Division of Market Regulation, Commission, on January 23, 2007. 16 *Id.* In addition, CBOE inquired whether the Holdback Timer will apply only to market maker quotations and asked the Exchange to clarify what information will be delayed by the Holdback Timer. Amex clarified that the Holdback Timer will be applied when there is a change in the price and/or size of the security underlying an option. The Exchange will wait (for a period up to one second) until multiple market participants have adjusted their quotes and then will disseminate a new quotation. The Exchange will apply the Holdback Timer to all data that it sends to OPRA. 17 Finally, in response to CBOE's inquiry regarding the treatment of incoming marketable orders, Amex indicated that Holdback Timer only “addresses the dissemination of quote changes on the Exchange not the execution of orders.” 18 Therefore, incoming marketable orders sent to the Exchange will automatically trade against Amex's current internal quotation that may be delayed during the one second holdback period. 17 *See* Exchange Response, *supra* note 6. 18 Telephone conversation between Michael T. Bickford, Senior Vice President, Amex, and Jennifer L. Colihan, Special Counsel, Cyndi N. Rodriguez, Special Counsel, and Johnna B. Dumler, Special Counsel, Division of Market Regulation, Commission, on January 23, 2007. IV. Conclusion *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 19 that the proposed rule change (SR-Amex-2006-106), as modified by Amendment No. 1, be, and hereby is, approved on a six-month pilot basis, which will commence on January 26, 2007. 19 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 20 20 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-1591 Filed 1-31-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55155; File No. SR-BSE-2006-49] Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Order Granting Approval To Proposed Rule Change as Modified by Amendment No. 1 Thereto, To Implement a Pilot Program To Quote Options in Pennies January 23, 2007. I. Introduction On November 17, 2006, the Boston Stock Exchange, Inc. (“BSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 a proposed rule change to amend the Boston Options Exchange (“BOX”) Rules to permit certain option classes to be quoted in pennies on a pilot basis. The proposed rule change was published for comment in the **Federal Register** on November 27, 2006. 3 The Commission received no comment letters on the proposed rule change. On January 5, 2007, the Exchange filed Amendment No. 1 to the proposed rule change. 4 This order approves the proposed rule change as modified by Amendment No. 1. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 54789 (November 20, 2006), 71 FR 68654. 4 Amendment No. 1 proposed to replace Glamis Gold, which was delisted, with Agilent Tech, Inc. in the list of options classes permitted to be quoted in pennies. Amendment No. 1 is technical in nature, and the Commission is not publishing Amendment No. 1 for public comment. II. Description of the Proposal BOX proposes to amend its rules to permit certain option classes to be quoted in pennies during a six-month pilot (“Penny Pilot Program”), which would commence on January 26, 2007. Specifically, the Exchange proposes to amend Section 6 (“Minimum Trading Increments”) and to add a new section, Section 33, (“Penny Pilot Program”) to Chapter V (“Doing Business on BOX”) of the BOX Rules. Currently, all six options exchanges, including BOX, quote options in nickel and dime increments. The minimum price variation for quotations in options series that are quoted at less than $3 per contract is $0.05 and the minimum price variation for quotations in options series that are quoted at $3 per contract or greater is $0.10. Under the Penny Pilot Program, beginning on January 26, 2007, market participants would be able to begin quoting in penny increments in certain series of option classes. The Penny Pilot Program would include the following thirteen options: Ishares Russell 2000 (IWM); NASDAQ-100 Index Tracking Stock (QQQQ); SemiConductor Holders Trust (SMH); General Electric Company (GE); Advanced Micro Devices, Inc. (AMD), (Microsoft Corporation (MSFT); Intel Corporation (INTC); Caterpillar, Inc. (CAT); Whole Foods Market, Inc. (WFMI); Texas Instruments, Inc. (TXN); Flextronics International Ltd. (FLEX); Sun Microsystems, Inc. (SUNW); and Agilent Technologies, Inc. (A). The minimum price variation for all classes included in the Penny Pilot Program, except for the QQQQs, would be $0.01 for all quotations in option series that are quoted at less than $3 per contract and $0.05 for all quotations in option series that are quoted at $3 per contract or greater. The QQQQs would be quoted in $0.01 increments for all options series. BOX commits to deliver a report to the Commission during the fourth month of the pilot, which would be composed of data from the first three months of trading. The report would analyze the impact of penny pricing on market quality and options system capacity. III. Discussion After careful review of the proposal, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 5 In particular, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act, 6 which requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 5 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 6 15 U.S.C. 78f(b)(5). The Commission believes that the implementation of a limited six-month Penny Pilot Program by BOX and the five other options exchanges will provide valuable information to the exchanges, the Commission and others about the impact of penny quoting in the options market. In particular, the Penny Pilot Program will allow analysis of the impact of penny quoting on:

(1)Spreads;

(2)transaction costs;

(3)payment for order flow; and

(4)quote message traffic. The Commission believes that the thirteen options classes to be included in the penny pilot program represent a diverse group of options classes with varied trading characteristics. This diversity should facilitate analyses by the Commission, the options exchanges and others. The Commission also believes that the Penny Pilot Program is sufficiently limited that it is unlikely to increase quote message traffic beyond the capacity of market participants' systems and disrupt the timely receipt of quote information. Nevertheless, because the Commission expects that the Penny Pilot Program will increase quote message traffic, the Commission has already approved the Exchange's proposal to reduce the number of quotations it disseminates. 7 7 BOX submitted its proposed quote mitigation strategy in SR-BSE-2006-48. *See* Securities Exchange Act Release No. 55073 (January 9, 2007), 72 FR 2047 (January 17, 2006). IV. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 8 that the proposed rule change (SR-BSE-2006-49), as modified by Amendment No. 1, be, and hereby is, approved on a six-month pilot basis, which will commence on January 26, 2007. 8 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-1592 Filed 1-31-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55176; File No. SR-CBOE-2007-08] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to the Establishment of a Pilot Program That Increases Position and Exercise Limits for Options on the iShares® Russell 2000® Index Fund January 25, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on January 22, 2007, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by CBOE. On January 22, 2007, CBOE submitted Amendment No. 1 to the proposed rule change. CBOE has filed the proposal pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes to amend Rule 4.11 to exempt options on the iShares® Russell 2000® Index Fund (“IWM”) from the position and exercise limits provided for under the Rule 4.11 Pilot Program and to increase the standard position and exercise limits for IWM as part of a six-month pilot (“Rule 4.11 IWM Pilot Program”). The text of the proposed rule change is available at CBOE, the Commission's Public Reference Room, and *http://www.cboe.com.* II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CBOE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. CBOE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Interpretation and Policy .07 to Rule 4.11 on a six-month pilot basis to exempt options on IWM from the Rule 4.11 Pilot Program. Under the Rule 4.11 Pilot Program, the position and exercise limits for IWM would be reduced on January 22, 2007 from 500,000 to 250,000 contracts. The Exchange now proposes to allow position and exercise limits for options on IWM to remain at 500,000 contracts on a pilot basis, from January 22, 2007 through July 22, 2007. In June 2005, as a result of a 2-for-1 stock split, the position limit for IWM options was temporarily increased from 250,000 contracts (covering 25,000,000 shares) to 500,000 contracts (covering 50,000,000 shares). At the time of the split, the furthest IWM option expiration date was January 2007. Therefore, the temporary increase of the IWM position limit will revert to the pre-split level (as provided for in connection with the Rule 4.11 Pilot Program) of 250,000 contracts after expiration in January 2007, or on January 22, 2007. 5 5 *See* CBOE Research Circular #RS05-380, at 12. The Exchange believes that a position limit of 250,000 contracts is too low and may be a deterrent to the successful trading of IWM options. Importantly, options on IWM are 1/10 th the size of options on the Russell 2000® Index (“RUT”), which have a position limit of 50,000 contracts. 6 Traders who trade IWM options to hedge positions in RUT options are likely to find a position limit of 250,000 contracts in IWM options too restrictive and insufficient to properly hedge. For example, if a trader held 50,000 RUT options and wanted to hedge that position with IWM options, the trader would need—at a minimum-500,000 IWM options to properly hedge the position. Therefore, the Exchange believes that a position limit of 250,000 contracts is too low and may adversely affect market participants' ability to provide liquidity in this product. 6 *See* CBOE Rule 24.4(a); *see also* Securities Exchange Act Release Nos. 45309 (January 18, 2002), 67 FR 3757 (January 25, 2002) (SR-CBOE-2001-44) (increase of position and exercise limits to 300,000 for QQQ options); 47346 (February 11, 2003), 68 FR 8316 (February 20, 2003) (SR-CBOE-2002-26) (increase of position and exercise limits to 300,000 for DIA options); and 51041 (January 14, 2005), 70 FR 3408 (January 24, 2005) (SR-CBOE-2005-06) (increase of position and exercise limits for options on Standard and Poor's Depositary Receipts® from 75,000 to 300,000). Additionally, IWM options have grown to become one of the largest options contracts in terms of trading volume. For example, the volume in options on IWM set a new single-day record on June 8, 2006, when 760,803 contracts (120,229 calls and 640,574 puts) traded on that day. This record level volume beat the previous single-day high of 727,521 contracts on May 17, 2006. Further, over the previous six months, the average daily CBOE trading volume of IWM options has been 187,190 contracts and a total of 23,960,382 contracts have traded on the Exchange. As a result, the Exchange proposes that options on IWM be subject to position and exercise limits of 500,000 contracts on a pilot basis to run from January 22, 2007 through July 22, 2007. 7 The Exchange believes that increasing position and exercise limits for IWM options will lead to a more liquid and more competitive market environment for IWM options that will benefit customers interested in this product. 7 Pursuant to Interpretation and Policy .02 to CBOE Rule 4.12, the exercise limit established under Rule 4.12 for IWM options shall be equivalent to the position limit prescribed for IWM options in Interpretation and Policy .07 under Rule 4.11. The increased exercise limits would only be in effect during the pilot period, to run from January 22, 2007 through July 22, 2007. *See* Amendment No. 1 to the proposed rule change. The Exchange would require that each member or member organization that maintains a position on the same side of the market in excess of 10,000 contracts in the IWM option class, for its own account or for the account of a customer report certain information. 8 This data would include, but would not be limited to, the option position, whether such position is hedged and if so, a description of the hedge, and if applicable, the collateral used to carry the position. Exchange market-makers (including DPMs) would continue to be exempt from this reporting requirement as market-maker information can be accessed through the Exchange's market surveillance systems. In addition, the general reporting requirement for customer accounts that maintain a position in excess of 200 contracts will remain at this level for IWM options. 9 8 *See* CBOE Rule 4.13(b). 9 *See* CBOE Rule 4.13(a). 2. Statutory Basis CBOE believes that the proposed rule change is consistent with and furthers the objectives of Section 6(b)(5) of the Act, 10 in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 10 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the forgoing rule change does not:

(1)Significantly affect the protection of investors or the public interest;

(2)impose any significant burden on competition; and

(3)become operative for 30 days after the date of this filing, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 11 and Rule 19b-4(f)(6) thereunder. 12 11 15 U.S.C. 78s(b)(3)(A). 12 17 CFR 240.19b-4(f)(6). A proposed rule change filed under 19b-4(f)(6) normally may not become operative prior to 30 days after the date of filing. 13 However, Rule 19b-4(f)(6)(iii) 14 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative delay. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver would permit position and exercise limits for options on IWM to remain at 500,000 option contracts for a six-month pilot period. For this reason, the Commission designates the proposed rule change to be effective and operative upon filing with the Commission. 15 13 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-4(f)(6)(iii) requires that a self-regulatory organization submit to the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Commission has decided to waive the five-day pre-filing notice requirement. 14 *Id.* 15 For the purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). At any time within 60 days of the filing of such proposed rule change the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-CBOE-2007-08 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CBOE-2007-08. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of CBOE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2007-08 and should be submitted on or before February 22, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 16 16 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-1580 Filed 1-31-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55154; File No. SR-CBOE-2006-92] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Approval to Proposed Rule Change as Modified by Amendment No. 1 Thereto, Relating to the Penny Pilot Program January 23, 2007. I. Introduction On November 8, 2006, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 a proposed rule change to amend its rules to permit certain option classes to be quoted in pennies on a pilot basis. The proposed rule change was published for comment in the **Federal Register** on November 29, 2006. 3 The Commission received one comment letter on the proposed rule change. 4 On January 9, 2007, the Exchange filed Amendment No. 1 to the proposed rule change. 5 The Exchange responded to the comment letter on January 10, 2007. 6 This order approves the proposed rule change as modified by Amendment No. 1. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 54805 (November 21, 2006), 71 FR 69151. 4 *See* letter to Nancy M. Morris, Secretary, Commission, from Christopher Nagy, Chair, Securities Industry and Financial Markets Association (“SIFMA”) Options Committee, dated December 20, 2006 (“SIFMA Letter”). 5 Amendment No. 1 revised the Regulatory Circular CBOE will distribute to its members to reflect the replacement of Glamis Gold, which was delisted, with Agilent Tech, Inc. in the list of options classes permitted to be quoted in pennies. Amendment No. 1 is technical in nature, and the Commission is not publishing Amendment No. 1 for public comment. 6 *See* letter to Nancy M. Morris, Secretary, Commission, from Patrick Sexton, Associate General Counsel, CBOE, dated January 10, 2007 (“CBOE Letter”). II. Description of the Proposal A. Scope of the Penny Pilot Program CBOE proposes to amend its rules to permit certain option classes to be quoted in pennies during a six-month pilot (“Penny Pilot Program”), which would commence on January 26, 2007. Specifically, proposed CBOE Rule 6.42 would include a subparagraph stating that decimal increments for bids and offers for all series of option classes participating in the Penny Pilot Program will be announced by Regulatory Circular. The Regulatory Circular would set forth the parameters of the Penny Pilot Program. Currently, all six options exchanges, including CBOE, quote options in nickel and dime increments. The minimum price variation for quotations in options series that are quoted at less than $3 per contract is $0.05 and the minimum price variation for quotations in options series that are quoted at $3 per contract or greater is $0.10. Under the Penny Pilot Program, beginning on January 26, 2007, market participants would be able to begin quoting in penny increments in certain series of option classes. The Penny Pilot Program would include the following thirteen options: Ishares Russell 2000 (IWM); NASDAQ-100 Index Tracking Stock (QQQQ); SemiConductor Holders Trust (SMH); General Electric Company (GE); Advanced Micro Devices, Inc. (AMD), (Microsoft Corporation (MSFT); Intel Corporation (INTC); Caterpillar, Inc. (CAT); Whole Foods Market, Inc. (WFMI); Texas Instruments, Inc. (TXN); Flextronics International Ltd. (FLEX); Sun Microsystems, Inc. (SUNW); and Agilent Tech, Inc. (A). The Exchange would communicate the list of options to be included in the Penny Pilot Program to its membership via Regulatory Circular. The minimum price variation for all classes included in the Penny Pilot Program, except for the QQQQs, would be $0.01 for all quotations in option series that are quoted at less than $3 per contract and $0.05 for all quotations in option series that are quoted at $3 per contract or greater. The QQQQs would be quoted in $0.01 increments for all options series. CBOE commits to deliver a report to the Commission during the fourth month of the pilot, which would be composed of data from the first three months of trading. The report would analyze the impact of penny pricing on market quality and options systems capacity. CBOE also proposes to amend CBOE Rule 6.54 relating to accommodation liquidations (“cabinet trades”) to state that the rule is not applicable to trading in option classes participating in the Penny Pilot Program. Currently, CBOE Rule 6.54 sets forth the terms and conditions in which cabinet trades can be executed on CBOE. Because cabinet trades involve orders priced at $1 per option contract, the specific terms and conditions for cabinet trading are not applicable to option classes participating in the Penny Pilot Program. B. Quote Mitigation Strategies To mitigate quote message traffic, CBOE has represented to the Commission that it has already implemented or intends to implement the following quote mitigation strategies. • *Limitation on Messages.* Pursuant to CBOE Rule 6.23A, CBOE currently limits the number of messages sent by members accessing CBOE electronically in order to protect the integrity of the Hybrid Trading System. Limiting the number of messages sent by members accessing CBOE electronically reduces the number of quotations sent by CBOE to the Options Price Reporting Authority (“OPRA”). • *Amendment to Market-Maker Obligations.* CBOE proposes to amend CBOE Rule 8.7 to modify the continuous electronic quoting obligation of Market-Makers and Remote Market-Makers (“RMMs”). Currently, as set forth in CBOE Rule 8.7(d)(ii) and (e), Market-Makers and RMMs, respectively, are obligated to provide continuous electronic quotes in 60% of the series of his/her appointed option class. CBOE proposes to amend these obligations to provide that Market-Makers and RMMs shall provide continuous electronic quotes in 60% of the series of his/her appointed class that have a time to expiration of less than nine months. CBOE believes that excluding series that are nine months or more to expiration, *i.e.* , LEAPS, from Market-Makers' and RMMs' continuous quoting obligations should reduce the number of quotes CBOE disseminates to OPRA, while continuing to impose upon Market-Makers and RMMs significant quoting obligations. CBOE also notes that this proposed change is consistent with CBOE Rule 5.8 which provides that the continuity rules do not apply to option series until the time to expiration is less than nine months. 7 7 The Commission recently approved a similar proposal from the Philadelphia Stock Exchange. See Securities Exchange Act Release No. 54648 (October 24, 2006), 71 FR 63375 (October 30, 2006) (SR-Phlx-2006-52). • *Delisting Policy.* CBOE is adopting the following delisting policy: equity option classes with national average daily volume (“ADV”) of less than 20 contracts will be delisted. • *Oversight of Member Quoting.* CBOE continuously monitors the quotation activity of its members submitting electronic quotations to CBOE, and regularly notifies any member that appears to be disseminating significantly more quotations than other members. CBOE also regularly communicates with independent vendors who provide quotation services to members to encourage the vendors to modify their systems to provide efficient quotation systems and to alert them whenever it appears that users of their system appear to be submitting significantly more quotations than other members. 8 8 In addition to the quote mitigation strategies discussed above, to encourage more efficient quoting by its members, the Exchange filed a proposed rule change on November 20, 2006, that assesses an additional monthly fee, commencing on February 1, 2007, on all Market Makers who submit electronic quotes to the Exchange of $.03 per 1,000 quotes in excess of 1,000,000 quotes. The proposed rule change was immediately effective under Section 19(b)(3)(A) of the Act. *See* Securities Exchange Act Release No. 54804 (November 21, 2006), 71 FR 69150 (November 29, 2006) (File No. SR-CBOE-2006-98). III. Discussion After careful review of the proposal and consideration of SIFMA's comment letter and the Exchange's response thereto, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 9 In particular, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act, 10 which requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 9 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 10 15 U.S.C. 78f(b)(5). The Commission believes that the implementation of a limited six-month Penny Pilot Program by CBOE and the five other options exchanges will provide valuable information to the exchanges, the Commission and others about the impact of penny quoting in the options market. In particular, the Penny Pilot Program will allow analysis of the impact of penny quoting on:

(1)Spreads;

(2)transaction costs;

(3)payment for order flow; and

(4)quote message traffic. The Commission believes that the thirteen options classes to be included in the penny pilot program represent a diverse group of options classes with varied trading characteristics. This diversity should facilitate analyses by the Commission, the options exchanges and others. The Commission also believes that the Penny Pilot Program is sufficiently limited that it is unlikely to increase quote message traffic beyond the capacity of market participants' systems and disrupt the timely receipt of quote information. Nevertheless, because the Commission expects that the Penny Pilot Program will increase quote message traffic, the Commission is also approving the Exchange's proposals to reduce the number of quotations it disseminates. SIFMA commented on the CBOE's quote mitigation proposal. 11 SIFMA recommends that all six of the option exchanges adopt a comprehensive and uniform quote mitigation strategy. In particular, SIFMA strongly supports the adoption of the “holdback timer” mitigation proposal as the most efficient means of reducing quotation traffic. SIFMA, however, expressed concern that the lack of uniformity among the quote mitigation proposals adopted by the exchanges will impose a burden on member firms and cause confusion for market participants, especially retail investors. 11 *See* SIFMA Letter, *supra* note 4. Although SIFMA urges the adoption of a uniform and comprehensive approach to quote mitigation, it does not oppose CBOE's quote mitigation proposals. In fact, SIFMA acknowledges that certain of CBOE's proposals, such as notifying members whose quote activity suggests systems malfunctions or wrong settings and delisting inactive series can contribute to quote mitigation. SIFMA, however, expressed its belief that these proposals do not go far enough to resolve the industry's concerns regarding systems capacity. Although the Commission supports efforts to implement a uniform, industry-wide quote mitigation plan, it does not believe such efforts preclude individual exchanges from initiating their own quote mitigation strategies. The Commission agrees with CBOE that its proposed quote mitigation strategies will not lead to confusion among market participants. 12 12 *See* CBOE Letter, *supra* note 6. IV. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 13 that the proposed rule change (SR-CBOE-2006-92), as modified by Amendment No. 1, be, and hereby is, approved on a six month pilot basis, which will commence on January 26, 2007. 13 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-1586 Filed 1-31-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55172; File No. SR-CBOE-2006-110] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto Relating to the Establishment of CBOE Stock Exchange, LLC January 25, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on December 26, 2006, the Chicago Board Options Exchange, Incorporated (the “CBOE” or “Exchange”) filed with the Securities and Exchange Commission (the “SEC” or “Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. CBOE filed Amendment No. 1 to the proposed rule change on January 10, 2007. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes to establish CBOE Stock Exchange (“CBSX”) as a facility, as that term is defined in Section 3(a)(2) of the Act, 3 of CBOE. CBSX will administer a fully automated marketplace for the trading of securities other than options by CBOE members. CBSX will be operated by CBOE Stock Exchange, LLC (“CBSX LLC”), a Delaware limited liability company. In this filing, CBOE submitted to the Commission the First Amended and Restated Operating Agreement (“Operating Agreement”) of CBSX LLC. The Certificate of Formation and the Operating Agreement are the source of CBSX LLC's governance and operating authority, and therefore, function in a similar manner as articles of incorporation and bylaws for a corporation. Additionally, CBOE proposes to adopt Rule 3.32 pertaining to ownership concentration and affiliation limitations. 3 15 U.S.C. 78c(a)(2). The text of the proposed rule change is available on the Exchange's Web site ( *http://www.cboe.com* ), at the Office of the Secretary, CBOE, and at the Commission's Public Reference Room. The text of the proposed rule change is also available on the Commission's Web site ( *http://www.sec.gov/rules/sro.shtml* ). II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CBOE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. CBOE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose CBOE is a registered national securities exchange under Section 6 of the Act and a self-regulatory organization (“SRO”). CBOE indicates that CBSX will be a facility of CBOE, subject to self-regulation by CBOE and oversight by the SEC. CBOE will act as the SRO for CBSX pursuant to a Services Agreement to be entered into between CBOE and CBSX LLC. CBOE will have the primary regulatory responsibility for the activities of CBSX. CBOE represents that it has adequate funds to discharge all regulatory functions related to the facility that it has undertaken to perform under the Services Agreement. 4 4 CBOE represents that CBSX LLC will not be entitled to any revenue generated in connection with penalties, fines, and regulatory fees that may be assessed by CBOE against CBOE members in connection with trading on CBSX. Rather, all regulatory fines, penalties and fees assessed against and paid by CBOE members to CBOE in connection with trading on CBSX shall remain with CBOE. In this filing, CBOE submitted to the SEC the Certificate of Formation and the Operating Agreement of CBSX LLC, which specifically relate to the control and governance of CBSX LLC that would ensure that CBOE has the authority within CBSX LLC to maintain CBOE's responsibility for all regulatory functions related to CBSX. The Operating Agreement provides that CBOE and the SEC would have regulatory authority over the CBSX LLC owners and the members of CBSX LLC's Board of Directors. CBOE will submit separate rule filings to establish rules relating to listing, membership and trading on CBSX. 5 Because the primary purpose of this rule filing is to focus on those provisions that are directly related to CBSX LLC's governance and ownership, and CBOE's authority for all regulatory functions of the CBSX, the Exchange's discussion in this filing will be limited to those relevant provisions of the Operating Agreement. 5 The Commission notes that on December 18, 2006, the Exchange filed a proposed rule change relating to a permit program for CBSX. *See* Securities Exchange Act Release No. 54987, 71 FR 78481 (December 29, 2006). The Commission also notes that on December 29, 2006, the Exchange filed a proposed rule change to establish the equity trading rules for CBSX. *See* Securities Exchange Act Release No. 55034, 72 FR 1350 (January 11, 2007). CBSX LLC As a limited liability company, ownership of CBSX LLC is represented by limited liability membership interests in CBSX LLC. The holders of such interests are referred to as “Owners” in this rule filing. 6 Initially, there are five Owners of CBSX LLC. CBOE is one of the Owners of CBSX LLC, and owns all “Series A” Voting Shares 7 of CBSX LLC, representing (50%) of CBSX LLC. 8 The other four Owners and their respective ownership interests are: VDM Chicago, LLC (20%); LaBranche & Co., Inc. (10%); IB Exchange Corp. (10%); and Susquehanna International Group, LLP. (10%). Each of these four Owners owns “Series B” Voting Shares of CBSX LLC. 6 “Owner” means a limited liability company “member” as that term is defined in § 18-101(11) of the Delaware Limited Liability Company Act (“DLLCA”), and shall include each Voting Owner and each Management Owner, but only so long as such person is shown on CBSX's books and records as the owner of at least one

(1)Share (or fraction of one

(1)Share). “Owner” shall include a “Substituted Owner” as defined in Section 6.5(a) of the Operating Agreement, but only upon compliance with all of the requirements of Sections 6.4 and 6.5 of the Operating Agreement. For purposes of clarity, no person shall become an “Owner” as to any Shares, if the acquisition of those Shares will require a change of ownership notice to the SEC, or will constitute a proposed rule change subject to the requirements of the rule filing process of Section 19 of the Act, until all of the requirements of such notice or rule filing process have been accomplished and, if necessary, approved by the SEC. *See* Section 2.1(16) of the Operating Agreement. 7 “Voting Shares” means those Shares entitled to vote on matters submitted to the Owners, which Voting Shares are held by the Voting Owners. *See* Section 2.1(27) of the Operating Agreement. 8 As noted in Section 3.2 of the Operating Agreement, it is the intention of the Owners that no other members of CBSX LLC (other than Affiliates of CBOE) be owners of Series A Voting Shares, and that no additional Series A Voting Shares be authorized, created or issued for such purpose; provided however, that this provision is not intended to limit or restrict any rights of CBOE to transfer any of its Series A Voting Shares with the prior approval of the SEC as provided for in Article VI, including Section 6.14 of the Operating Agreement, or any other provision thereof, or any rights to be acquired by a transferee of those Shares as provided therein. Under Section 3.2 of the Operating Agreement, the CBSX LLC Board of Directors may authorize the issuance of “Series C” Non-Voting Restricted Shares 9 from time to time to employees, consultants, or officers of CBSX LLC, or any other person, each of whom will become a Management Owner 10 of CBSX LLC. 9 “Non-Voting Restricted Share” means a Share held by a Management Owner containing the voting limitations and other restrictions described in the Operating Agreement. *See* Section 2.1(15) of the Operating Agreement. 10 “Management Owner” means a natural person who is identified on Exhibit A of the Operating Agreement (Exhibit 5C to the proposed rule change) as a Management Owner, who subsequently becomes a Management Owner pursuant to the provisions of Section 3.2(c) of the Operating Agreement, or who is a transferee or assignee of Non-Voting Restricted Shares (other than a Voting Owner). *See* Section 2.1(13) of the Operating Agreement. As provided in Section 8.9 of the Operating Agreement, the outstanding Series A Voting Shares shall, in the aggregate (and without being deemed to be a voting trust), be entitled to a number of votes equal to 50% of the total number of Voting Shares outstanding, on each matter submitted to a vote of the Owners. Each outstanding Series B Voting Share shall be entitled to one vote on each matter submitted to a vote of the Owners. The Series C Non-Voting Restricted Shares shall not be entitled to vote on any matter submitted to a vote of the Owners. Governance of CBSX LLC Pursuant to Section 9.1 of the Operating Agreement, CBSX LLC will be managed by or under the direction of its own Board of Directors. Section 9.2 of the Operating Agreement provides that the Board of Directors will consist of 9 Directors and also provides how the composition of the Board of Directors shall be determined. Each Owner owning Series B Voting Shares representing at least five percent (5%) of the aggregate “Percentage Interests” 11 of CBSX LLC shall be entitled to designate one Director. The Owners of Series A Voting Shares (currently, CBOE) shall collectively be entitled to designate a number of Directors equal to the aggregate number of Directors designated by the Owners owning Series B Voting Shares representing at least five percent (5%) of the aggregate Percentage Interests of CBSX LLC. The Directors then shall designate one additional Director from the executive management of CBSX LLC. 11 “Percentage Interest” means with respect to an Owner, a fraction (expressed as a percentage) determined from time to time, the numerator of which is the number of all Shares held by such Owner and the denominator of which is the sum of all Shares held by all Owners. *See* Section 2.1(17) of the Operating Agreement. Thus, initially, VDM Chicago, LLC, LaBranche & Co., Inc., IB Exchange Corp., and Susquehanna International Group, LLP will each be entitled to designate one Director. CBOE, as the Owner of the Series A shares, will be entitled to designate four Directors. The eight Directors will then designate one additional Director from among the executive management of CBSX LLC. Section 9.2 of the Operating Agreement also provides that as long as CBSX remains a facility of CBOE, CBOE shall have the right to retain/designate one Director in the event CBOE is no longer otherwise entitled to designate any Directors pursuant to Section 9.2 of the Operating Agreement, whether or not CBOE maintains any Percentage Interest or is admitted to CBSX as an Owner. Under Section 9.3 of the Operating Agreement, a Director appointed pursuant to Section 9.2 of the Operating Agreement shall serve until his or her earlier death, resignation, or removal in a manner permitted by applicable law or the Operating Agreement, or, with respect to Directors designated by Owners of Series B Voting Shares, until such time as the Owner designating such Director ceases to own a Percentage Interest representing at least five percent (5%) of the aggregate Percentage Interests of CBSX LLC. In such latter event, upon the termination of service of such a Series B-designated Director, the service of a single Director designated by the Owner(s) of the Series A Voting Shares (identified by the Series A Owner(s) in their sole discretion) shall simultaneously terminate. Section 1.8 of the Operating Agreement provides that notwithstanding anything contained in the Operating Agreement to the contrary, so long as CBSX is a facility of CBOE, in the event that CBOE, in its sole discretion, determines that any action, transaction or aspect of an action or transaction, is necessary or appropriate for, or interferes with, the performance or fulfillment of CBOE's regulatory functions, its responsibilities under the Act or as specifically required by the SEC (collectively, “Regulatory Requirements”),

(i)CBOE's affirmative vote will be required to be included in order to constitute a “Super Majority Vote of the Owners,” 12

(ii)without CBOE's affirmative vote no such action, transaction or aspect of an action or transaction shall be authorized, undertaken or effective, and

(iii)CBOE shall have the sole and exclusive right to direct that any such required, necessary or appropriate act, as it may determine in its sole discretion, to be taken or transaction be undertaken by or on behalf of CBSX LLC without regard to the vote, act or failure to vote or act by any other party in any capacity. 12 “Super Majority Vote of the Owners” means, subject to the provisions of Section 1.8 of the Operating Agreement as to Regulatory Requirements, the affirmative vote of both

(i)all of the Owners of the Series A Voting Shares at the time, and

(ii)any two

(2)of the Initial Owners of Series B Voting Shares who then retain ownership of Series B Voting Shares. *See* Section 2.1(25) of the Operating Agreement. Section 5.6 of the Operating Agreement states that except as otherwise specifically provided by the Operating Agreement or required by the DLLCA or by the SEC pursuant to the Act, no Owner shall have the power to act for or on behalf of, or to bind, CBSX LLC. Section 5.7 of the Operating Agreement provides that CBSX LLC, and to the extent that it relates to CBSX LLC, each Owner, agrees to comply with the federal securities laws and the rules and regulations thereunder; to cooperate with the SEC and CBOE pursuant to their regulatory authority and the provisions of the Operating Agreement; and to engage in conduct that fosters and does not interfere with CBSX LLC's ability to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. Additionally, Section 5.7 of the Operating Agreement states that, after appropriate notice and opportunity for hearing, the Board, with the approving vote of both CBOE, in exercise of its authority under Section 1.8 of the Operating Agreement, and a majority vote of the Owners, excluding the vote of the Owner subject to sanction, may suspend or terminate an Owner's voting privileges or membership in CBSX LLC under the Operating Agreement:

(i)In the event such Owner is subject to a “statutory disqualification,” as defined in Section 3(a)(39) of the Act; or

(ii)in the event such Owner has violated any provision of the Operating Agreement implicating any federal or state securities law; or

(iii)if the Board determines that such action is necessary or appropriate in the public interest or for the protection of investors. Section 9.13 of the Operating Agreement also provides that a Director may be removed for cause by the act of a “Majority in Interest of the Owners” 13 at a meeting of the Owners called expressly for the purpose of removing the Director. For these purposes, “for cause” shall mean:

(1)The Director has

(A)committed a willful serious act of dishonesty, such as fraud, embezzlement or theft,

(B)committed or attempted any act against CBSX LLC intending to enrich himself or herself at the expense of CBSX LLC, or

(C)made an unauthorized use or disclosure of “Confidential Information;” 14

(2)the Director has been charged with an act constituting a felony;

(3)the Director has engaged in conduct that has caused serious injury, monetary or otherwise, to CBSX LLC; or

(4)the Director, in carrying out his or her duties, has been guilty of negligence or willful misconduct. 13 “Majority in Interest of the Owners” means the affirmative vote of more than 50% of the Voting Shares held solely by the Voting Owners. *See* Section 2.1(12) of the Operating Agreement. 14 “Confidential Information” means

(A)information relating to the terms of any contract, agreement or other relationship between CBSX LLC and a third party, an Owner, an Affiliate of CBSX LLC or an Owner, or any other person,

(B)information relating to the terms of the Operating Agreement or any other agreement between or among CBSX LLC, and an Owner, an Affiliate of CBSX LLC or an Owner, or any other person

(C)financial information about CBSX LLC, an Owner, an Affiliate of CBSX LLC or an Owner,

(D)any process, system or procedure with which or whereby CBSX LLC or any Owner or Affiliate of an Owner does business,

(E)any trade secrets, confidential know-how or designs, formulae, plans, devices, business information, software, systems, technology, financial data or material (whether or not patented or patentable) of CBSX LLC, or an Owner or Affiliate of CBSX LLC or an Owner, and

(F)any confidential member or user or customer lists of CBSX LLC, or an Owner or Affiliate of CBSX LLC or an Owner, in each case to which a party hereto becomes privy or learns of by reason of the Operating Agreement, discussions or negotiations relating to the Operating Agreement or the relationship of the parties contemplated hereby. *See* Section 2.1(6), and Section 15.2 of the Operating Agreement. Under Section 9.14 of the Operating Agreement, the Board of Directors may designate one or more committees, which shall be comprised of individuals chosen by the Board, and may at the Board's discretion include non-Board members. Any such committee, to the extent provided in the resolution, shall have the authority and power to exercise such functions as may be delegated by the Board, which delegation may be revoked by the Board at any time in its discretion and any action taken pursuant to such delegation may be modified, suspended, overruled or revoked by the Board at any time in its discretion. Section 9.15(a) of the Operating Agreement contains limitations on the authority of the Board of Directors. Specifically, Section 9.15(a) of the Operating Agreement provides that notwithstanding any contrary provision of this Agreement, and subject always to CBOE's rights to act under Section 1.8 of the Operating Agreement and the final provision of Section 9.15(a) of the Operating Agreement, it shall require the affirmative action of the Board, acting on behalf of CBSX LLC, the additional prior approving vote of CBOE, in exercise of its authority under Section 1.8 of the Operating Agreement, and a Super Majority of the Owners, to cause CBSX LLC to: • Enter into a material new line of business or exit or change a material line of business outside the scope of the business contemplated in Section 1.6 of the Operating Agreement; • Enter into any transaction with an Owner or Affiliate 15 of an Owner outside the ordinary course of business or requiring payments in excess of $1 million; 15 “Affiliate” means with respect to any person, any other person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such person. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise with respect to such person. *See* Section 2.1(1) of the Operating Agreement. • Make any material amendment to the organizational documents of CBSX LLC; • Engage in any liquidation, dissolution, reorganization or recapitalization; • Enter into licensing or other contractual arrangements, including without limitation, those providing for the encumbrance of assets or properties, outside the ordinary course of business, or requiring payments in excess of $1 million; • Grant Board seats to new Owners or alter Board seat allocations for or among existing Owners (which action will require compliance with the rule filing process of Section 19 of the Act as well); • Issue additional equity securities of CBSX LLC or securities convertible into equity securities of CBSX LLC, other than as provided for in Section 3.2(c) and

(d)of the Operating Agreement; • Declare or pay dividends or distributions, or repurchase any securities of CBSX LLC (other than Series C Non-Voting Restricted Shares), other than those that apply proportionately to all Owners; • Enter into any merger, consolidation or acquisition or sale of material assets or ownership interests; • Undertake an initial public offering; • Change senior level management, including entering into, terminating or amending employment agreements with management and key employees; • Materially change CBSX LLC's business model; • Change auditors or accounting policies, practices or procedures; • Change the status or registration of CBSX LLC as a facility of CBOE (which action will require compliance with the rule filing process of Section 19 of the Act as well); • Create or designate any new or additional class or series of Shares or increase the authorized number of Shares of any class or series; • Approve or authorize the acquisition by any person or group of a greater than 20% Percentage Interest in CBSX LLC (which action will require compliance with Section 6.14 of the Operating Agreement as well); or • Amend, or be bound by or recognize an amendment of, the provisions of Section 9.15(a) of the Operating Agreement in any way. Section 9.15(a) of the Operating Agreement further provides that without the affirmative vote of CBOE if exercised under Section 1.8 of the Operating Agreement, no such action, transaction or aspect of an action or transaction shall be authorized, undertaken or effective. Additionally, with respect to any matter, including those listed above, that implicates Regulatory Requirements, CBOE shall always have the sole discretion and authority to cause any action to be taken by and on behalf of CBSX LLC, as provided for in Section 1.8 of the Operating Agreement, without regard to the foregoing requirements of Section 9.15(a) of the Operating Agreement. CBOE believes that the foregoing limitations on the authority of the CBSX LLC Board enable CBOE to have authority over the actions of CBSX LLC especially as they relate to regulatory responsibilities. Under Section 9.15(c) of the Operating Agreement, each Director shall agree to comply with the federal securities laws and the rules and regulations thereunder, and to cooperate with the SEC and CBOE pursuant to their regulatory authority and the provisions of the Operating Agreement. In addition, each Director will take into consideration whether any actions taken or proposed to be taken as a Director for or on behalf of CBSX LLC, or any failure or refusal to act (including a failure to be present to constitute a quorum, or to reasonably provide an affirmative vote or consent) would constitute interference with CBOE's regulatory functions and responsibilities in violation of the Operating Agreement or the Act. Interference shall be determined reasonably and in good faith by the Board designees of CBOE, which determination will be final and binding. Section 9.16 of the Operating Agreement also provides that in serving as a Director, each Director agrees to comply with the federal securities laws and the rules and regulations thereunder; to cooperate with the SEC and CBOE pursuant to their regulatory authority and the provisions of the Operating Agreement; and to engage in conduct that fosters and does not interfere with CBSX LLC's ability to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. Moreover, after appropriate notice and opportunity for hearing, the Board, with the approving vote of both CBOE in exercise of its authority under Section 1.8 of the Operating Agreement, and a majority vote of the Owners, excluding the vote of the Owner whose Director designee is subject to sanction, may suspend or terminate a Director's service as such to CBSX LLC under the Operating Agreement:

(i)In the event such Director is subject to a “statutory disqualification,” as defined in Section 3(a)(39) of the Act; or

(ii)in the event such Director has violated any provision of the Operating Agreement implicating any federal or state securities law; or

(iii)if the Board determines that such action is necessary or appropriate in the public interest or for the protection of investors. CBOE believes that these provisions, including Sections 5.7, 9.15(c) and 9.16 of the Operating Agreement, would require each CBSX LLC Director to adhere to regulatory responsibilities in that they must comply with federal securities laws and the rules and regulations promulgated thereunder, and cooperate with the SEC and CBOE pursuant to their regulatory authority. Changes in Ownership of CBSX LLC Pursuant to Section 6.1 of the Operating Agreement, an Owner shall have the right to assign Shares only by a written assignment, the terms of which do not contravene any provision of this Operating Agreement, and which has been duly executed by the assignor and assignee, received by the Board, and recorded on the books of CBSX LLC. For all purposes of the Operating Agreement, the terms “transfer” and “assign,” and all derivatives or variants of those terms, include any transfer, disposition, sale, gift, bequest, pledge, encumbrance, hypothecation, exchange or other act whether voluntary or involuntary, by operation of law or otherwise, whereby an Owner's ownership, interest, or rights in any Shares are disposed of, impaired, or in any way affected. Section 6.2 of the Operating Agreement states that, subject to the requirements of Article VI of the Operating Agreement, an Owner can assign any portion of its shares to a “Permitted Transferee.” A “Permitted Transferee” means

(i)as to any Owner, an Affiliate of such Owner, and not the Affiliate of any other Owner,

(ii)as to VDM Chicago, LLC during the period specified in the Operating Agreement, Mill Bridge IV, LLC or CBONP, LLC, 16 or

(iii)as to any Owner that is an individual

(A)such Owner's estate, heirs or beneficiaries,

(B)any guardian or conservator appointed for such Owner's estate, or

(C)any trust for the benefit of such Owner or such Owner's immediate family members, or to any limited partnership or limited liability company in which the non-controlling partners or members, as the case may be, are members of such Owner's immediate family, and so long as the Owner is the sole trustee, general partner or manager of such trust, limited partnership or limited liability company, as the case may be. A Permitted Transferee shall become a Substituted Owner only if and as provided in Sections 6.4 and 6.5 of the Operating Agreement. 16 Prior to SEC approval of this rule filing, VDM Chicago Holdings, LLC, Mill Bridge IV, LLC, and CBONP, LLC will execute an Indirect Controlling Party Amendment to the Operating Agreement, pursuant to Section 15.16 of the Operating Agreement. Section 6.3 of the Operating Agreement further provides that no Owner may sell, assign, give, pledge, or otherwise voluntarily transfer, or involuntarily transfer by bankruptcy, death or disability, shares to a person other than a Permitted Transferee, and no shares shall be transferred on the books of CBSX LLC other than a transfer to a Permitted Transferee, unless prior to that transfer, an Owner, or, in the case of an involuntary transfer, the legal representative or successor in interest of an Owner (the “Transferring Owner”), first notifies CBSX LLC and all voting Owners (but not Management Owners) in writing of the number of shares that the Transferring Owner proposes to transfer pursuant to a bona fide offer received by the Transferring Owner, and otherwise complies with restrictions and conditions in Article VI pertaining to sale and transfer of shares. Under Section 6.4 of the Operating Agreement, a Permitted Transferee and a transferee having purchased Shares after the Transferring Owner has complied with the right of first refusal set forth in Section 6.3(a) and

(b)of the Operating Agreement, shall become a Substituted Owner, 17 provided that

(i)the Permitted Transferee or other transferee executes a written acceptance and adoption of all terms and provisions of the Operating Agreement, as the same may have been amended, and

(ii)all of the applicable requirements of a change of ownership notice to the SEC as required by Section 6.13 of the Operating Agreement, or a proposed rule change subject to the requirements of the rule filing process of Section 19 of the Act as required by Section 6.14 of the Operating Agreement have been accomplished and, if necessary, approved by the SEC. 17 “Substituted Owner” is a person admitted to all of the rights, and except as provided in the following sentence, who assumes all of the obligations, of an Owner who has made an assignment of shares in accordance with Section 6.4 of the Operating Agreement. Such obligations shall not include any obligation of the assignor to return to CBSX LLC or pay to a creditor, in accordance with Section 3.4 of the Operating Agreement, all or any part of a distribution that previously was made to the assignor. *See* Section 6.5 of the Operating Agreement. Section 6.7 of the Operating Agreement provides that no transfer or assignment of any shares may be made if, in the written opinion of counsel for CBSX LLC:

(1)Such transfer or assignment, together with all other transfers and assignments of shares within the preceding twelve months, would result in a termination of CBSX LLC for purposes of Internal Revenue Code § 708 or any comparable provision then in effect;

(2)such transfer or assignment would violate the Securities Act of 1933, as amended, or applicable state securities or Blue Sky laws, or any other applicable provision of law in any respect; or

(3)such transfer or assignment would cause CBSX LLC to be treated as an association taxable as a corporation rather than as a partnership for federal, state or local income tax purposes. Ownership/Voting Limitations Section 6.12 of the Operating Agreement contains ownership concentration limitations. Specifically, Section 6.12(a) of the Operating Agreement provides that no person (other than CBOE), either alone or together with its Affiliates, at any time, may be an Owner, directly or indirectly, of record or beneficially, of an aggregate amount of Shares that would result in a greater than twenty percent (20%) Percentage Interest in CBSX LLC (the “Concentration Limitation”). Section 6.12(b) of the Operating Agreement states that the Concentration Limitation shall apply to each person (other than CBOE) unless and until:

(i)Such person shall have delivered to the Board a notice in writing, not less than 45 days (or such shorter period as the Board shall expressly consent to) prior to the acquisition of any Shares that would cause such person (either alone or together with its Affiliates) to exceed the Concentration Limitation, of such person's intention to acquire such ownership;

(ii)the Board shall have, in its sole discretion, consented to expressly permit such ownership; and

(iii)such waiver shall have been filed with, and approved by, the SEC under Section 19(b) of the Act and shall have become effective thereunder. Section 6.12(c) of the Operating Agreement states that in exercising its discretion under Section 6.12(b) of the Operating Agreement, the Board shall have determined that

(i)such beneficial ownership of Shares by such person, either alone or together with its Affiliates, will not impair the ability of CBSX LLC and the Board to carry out their functions and responsibilities, including but not limited to, under the Act, and is otherwise in the best interests of CBSX LLC and its Owners;

(ii)such beneficial ownership of Shares by such person, either alone or together with its Affiliates, will not impair the ability of the SEC to enforce the Act;

(iii)neither such person nor its Affiliates are subject to any applicable “statutory disqualification” (within the meaning of Section 3(a)(39) of the Act); and

(iv)neither such person nor its Affiliates is a member of CBOE. Section 6.13 of the Operating Agreement provides that beginning after SEC approval of this proposed rule change, CBSX LLC shall provide the SEC with written notice ten days prior to the closing date of any transaction that results in a person's Percentage Interest, alone or together with any Affiliate, meeting or crossing the threshold level of 5% or the successive 5% Percentage Interest levels of 10% and 15%. Section 6.14 of the Operating Agreement provides that beginning after SEC approval of this proposed rule change, in addition to the notice requirement in Section 6.13 of the Operating Agreement,

(i)any transfer that results in the acquisition and holding by any person, alone or together with any Affiliate, of an aggregate Percentage Interest level permitted by Section 6.12 of the Operating Agreement that meets or crosses the threshold level of 20% or any successive 5% Percentage Interest level (i.e., 25%, 30%, etc.); and

(ii)any transfer of Series A Voting Shares to a Permitted Transferee of CBOE or any of its Affiliates, will constitute a proposed rule change that will be subject to the requirements of the rule filing process of Section 19 of the Act, subject to approval by the SEC, and CBSX LLC shall make all necessary filings with the SEC thereunder. Under Section 8.10 of the Operating Agreement, in the event that, despite the Concentration Limitation prohibitions of Section 6.12 of the Operating Agreement, an Owner of Series B Voting Shares that is also a CBOE member owns more than 20% of the outstanding Voting Shares, alone or together with any Affiliate of such Owner (Shares owned in excess of 20% being referred to as “Excess Shares”), the Owner and its designated Directors shall have no voting rights whatsoever, nor right to give any proxy in relation to a vote of the Owner, with respect to the Excess Shares held by such Owner. However, irrespective of whether such Owner or its designated Directors otherwise participate in a meeting in person or by proxy, such Owner's Excess Shares shall be counted for quorum purposes, and shall be counted as being voted on each matter in the same proportions as the Voting Shares held by the other Owners are voted (including any abstentions from voting). CBOE believes that these provisions will prevent any person from exercising undue control over CBSX LLC and will protect the ability of CBOE, as well as other investors, to exercise its full ownership rights. By specifically imposing a voting limitation on any person other than CBOE that owns shares which represent in the aggregate more than 20% of the voting power then entitled to be cast, CBOE is ensuring that it is in all cases, able to maintain proper control over the exercise of its regulatory function in relation to CBSX LLC, and is not subject to influence that may be adverse to its regulatory responsibilities from any person who may own a substantial number of the outstanding shares. This provision and other related provisions relating to notice and rule filing requirements with respect to any person who acquires certain Percentage Interest levels in CBSX LLC will serve to protect the integrity of CBOE's self-regulatory responsibilities. Regulatory Jurisdiction Over CBSX LLC and Its Owners As noted earlier, CBOE will regulate CBSX as a facility of the Exchange. CBOE has responsibility under the Act for the CBSX facility. CBSX LLX, as owner and operator of the CBSX facility, will also be subject to the SEC's jurisdiction. In this regard, Section 6.15(a) of the Operating Agreement provides that the Owners acknowledge that to the extent they are directly related to CBSX LLC's activities, the books, records, premises, officers, directors, agents, and employees of the Owners shall be deemed to be the books, records, premises, officers, directors, agents, and employees of the Regulatory Services Provider 18 and its Affiliates for the purpose of and subject to oversight pursuant to the Act. Section 6.15(b) of the Operating Agreement additionally provides that the books, records, premises, officers, directors, agents, and employees of CBSX LLC shall be deemed to be the books, records, premises, officers, directors, agents, and employees of CBOE for the purpose of and subject to oversight pursuant to the Act. 18 “Regulatory Services Provider” means CBOE for the term of the regulatory services to be provided under the Services Agreement. *See* Section 2.1(22) of the Operating Agreement. Under Section 6.15(c) of the Operating Agreement, CBSX LLC, the Owners and the respective officers, directors, agents, and employees of each irrevocably submit to the jurisdiction of the U.S. federal courts, the SEC, and CBOE, for the purposes of any suit, action or proceeding pursuant to U.S. federal securities laws or the rules or regulations thereunder, directly arising out of, or directly relating to, CBSX LLC's activities, and hereby waive, and agree not to assert by way of motion, as a defense or otherwise in any such suit, action or proceeding, any claims that they are not personally subject to the jurisdiction of the U.S. federal courts, SEC, or CBOE, that the suit, action or proceeding is an inconvenient forum or that the venue of the suit, action or proceeding is improper, or that the subject matter thereof may not be enforced in or by such courts or agency, and, to the fullest extent permitted by law, waive the defense or application of any foreign secrecy or blocking statues or regulations with respect to the Owner, its officers, directors, agents and employees, that relate to CBSX LLC's activities or their participation therein or in connection therewith. Section 6.15(d) of the Operating Agreement states that CBSX LLC and each Owner shall take such action as is necessary, unless otherwise provided for by law, written statement of policy, individual contract or otherwise, to ensure that the officers, directors, agents and employees of each consent in writing to the applicability of this provision with respect to CBSX LLC-related activities. Consent in writing to the provisions of this Section 16.15(d) of the Operating Agreement extends to the confidentiality provisions in Section 15.2 of the Operating Agreement. Section 13.2 of the Operating Agreement provides, in part, that CBSX LLC's complete records and books of account shall be subject at all times to inspection and examination by CBOE and the SEC at no additional charge to CBOE and the SEC. CBOE believes that these provisions will serve as notice to Owners that they will be subject to the jurisdiction of the U.S. federal courts, the SEC, and CBOE. It is important that regulatory cooperation is assured from all Owners, regardless of the Owner's business location, country of domicile or other circumstances which the SEC may deem to have the potential to be adverse to the regulatory responsibilities and interests of CBOE, the SEC or the U.S. federal courts. Finally, Section 15.2 of the Operating Agreement generally provides that no Owner shall disclose any “Confidential Information” to any person or use any confidential information to the detriment of CBSX LLC or its Owners or for its own benefit or the benefit of others, except with the consent of the Board or as required by law or as requested by any governmental or regulatory authority (provided that such Owner shall notify the Board promptly of any request for information before disclosing it, if practicable and permitted by applicable law), and other than with respect to CBOE's communications with the SEC with respect to the conduct of CBSX LLC's business. Section 15.2 of the Operating Agreement further provides that nothing in the Operating Agreement shall be interpreted to limit or impede the rights of the SEC or CBOE to access and examine any Confidential Information pursuant to the U.S. federal securities laws and the rules thereunder, or to limit or impede the ability of an Owner or an officer, director, agent or employee of an Owner to disclose any Confidential Information to the SEC or CBOE. Proposed New Rule 3.32 CBOE proposes to adopt a new Rule 3.32—Ownership Concentration and Affiliation Limitation, as requested by the SEC staff. 19 Paragraph

(a)of Rule 3.32 sets forth the “Concentration Limitation” applicable to CBSX LLC, and specifically states that for as long as CBSX LLC operates as a facility of the Exchange, no member of the Exchange, either alone or together with its Affiliates, at any time, may own, directly or indirectly, of record or beneficially, an aggregate amount of Shares that would result in a greater than twenty percent (20%) Percentage Interest in CBSX LLC. 20 In the event a member inadvertently violates the “Concentration Limitation,” Paragraph

(c)of Rule 3.32 provides that the member shall have 180 days to cure the inadvertent violation. In the event the violation is not cured during such time, the member shall have all trading rights and privileges suspended on CBSX, and shall also be subject to any appropriate disciplinary action, including action for the failure of such member to enter into the CBSX LLC Operating Agreement. 19 CBOE notes that Rule 3.32 is similar to ISE Rule 312, and Article 9 Section 12 of the Boston Stock Exchange Constitution. 20 For purposes of this paragraph (a), and unless the context otherwise requires, the terms “Affiliate,” “Share,” and “Percentage Interest” shall have the same meaning specified in the CBSX LLC Operating Agreement. Paragraph

(b)of Rule 3.32 provides that without prior SEC approval, the Exchange or any entity with which it is affiliated shall not directly acquire or maintain an ownership interest in an Exchange member. In addition, without prior SEC approval, no Exchange member shall be or become affiliated with

(i)the Exchange or

(ii)any affiliate of the Exchange. Paragraph

(b)of Rule 3.32 also states that nothing therein shall prohibit a member from acquiring or holding an equity interest in CBSX LLC that is permitted by the “Concentration Limitation” or from being affiliated with OneChicago, LLC, provided that the Exchange's proportionate share of OneChicago, LLC's gross revenues does not exceed 5% of the Exchange's gross revenues. 21 21 *See* Amendment No. 1. OneChicago, LLC is a joint venture of Interactive Brokers Group, LLC, CBOE, the Chicago Mercantile Exchange, and the Chicago Board of Trade. It is an electronic security futures exchange that trades futures on individual stocks, narrow-based indexes and ETFs. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations under the Act applicable to a national securities exchange and, in particular, the requirements of Section 6(b) of the Act. Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) Act 22 requirements that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts and, in general, to protect investors and the public interest. 22 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or

(ii)as to which CBOE consents, the Commission will:

(A)By order approve such proposed rule change, or

(B)institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form *(http://www.sec.gov/rules/sro.shtml)* ; or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-CBOE-2006-110 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CBOE-2006-110. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site *(http://www.sec.gov/rules/sro.shtml).* Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2006-110 and should be submitted on or before February 22, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 23 23 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-1595 Filed 1-31-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55164; File No. SR FICC-2006-20] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Modify the EPN Rules of its Mortgage-Backed Securities Division to Implement New Messaging Capabilities and Establish a Fee Structure January 24, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 notice is hereby given that on December 28, 2006, the Fixed Income Clearing Corporation (“FICC”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change described in Items I, II, and III below, which items have been prepared primarily by FICC. FICC filed the proposed rule change pursuant to Section 19(b)(3)(A)(ii) and

(iii)of the Act 2 and Rules 19b-4(f)(2) and 19b-4(f)(4) thereunder 3 so that the proposal was effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested parties. 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78s(b)(3)(A)(ii) and (iii). 3 17 CFR 240.19b-4(f)(2) and 240.19b-4(f)(4). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The purpose of the proposed rule change is to modify the Electronic Pool Notification (“EPN”) rules of FICC's Mortgage-Backed Securities Division (“MBSD”) to implement new messaging capabilities for participants using the EPN service and to establish a fee structure for the new messaging capabilities. 4 4 The text of the proposed rule change is available at the FICC, at *http://www.ficc.com/commondocs/rule.filings/rule.filing.06-20.pdf* , and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FICC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FICC has prepared summaries, set forth in sections (A), (B), and

(C)below, of the most significant aspects of these statements. 5 5 The Commission has modified the text of the summaries prepared by FICC.

(A)Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The purpose of the proposed rule filing is to modify the EPN Rules of the MBSD to implement new messaging capabilities for participants using the EPN service and to establish a fee structure for the new messaging capabilities. Currently, MBSD participants who wish to effect a pool substitution through the EPN service must submit two separate messages to the MBSD to effect the substitution—one to cancel the originally allocated pool and one to submit the substituted pool. In the alternative, participants may manually cancel the originally allocated pool and specify the substituted pool to a contra-party through phone or fax messages. Either process is cumbersome and inefficient for members. To remedy this, the MBSD has created a new EPN message type called the “Cancel/Correct Pool Substitution” (“Cancel/Correct”) to support the simultaneous cancellation of previously allocated pools and notification of substituted pools. By introducing the Cancel/Correct message, FICC will provide MBSD participants with an efficient method of transmitting pool substitutions to their allocation counterparties. 6 6 Existing EPN messages and processes will continue to be supported without change. FICC will amend the EPN fee schedule to incorporate related charges for the new Cancel/Correct message types. The proposed billing structure takes into account the Securities Industry and Financial Markets Association's cut-off times for delivering substitution and replacement pool information. The proposed rule change is consistent with the requirements of Section 17A of the Act and the rules and regulations thereunder because it will enable FICC to improve messaging capabilities in the EPN system, leading to an increase in efficiencies for FICC and its members. This will enable FICC to better ensure the accurate reporting, clearance, and settlement of securities transactions.

(B)Self-Regulatory Organization's Statement on Burden on Competition FICC does not believe that the proposed rule change will have any impact or impose any burden on competition.

(C)Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others Written comments relating to the proposed rule change have not yet been solicited or received. FICC will notify the Commission of any written comments received by FICC. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective upon filing pursuant to Section 19(b)(3)(A)(iii) of the Act 7 and Rule 19b-4(f)(4) 8 thereunder because the proposed rule change effects a change in an existing service of FICC that

(i)does not adversely affect the safeguarding of securities or funds in the custody or control of FICC and

(ii)does not significantly affect the respective rights or obligations of FICC or those members using the service. The foregoing rule change has also become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 9 and Rule 19b-4(f)(2) 10 thereunder because the proposed rule establishes or changes a due, fee, or other charge applicable only to participants. At any time within sixty days of the filing of such rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 7 15 U.S.C. 78s(b)(3)(A)(iii). 8 17 CFR 240.19b-4(f)(4). 9 15 U.S.C. 78s(b)(3)(A)(ii). 10 17 CFR 240.19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ) or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-FICC-2006-20 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-FICC-2006-20. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington, DC 20549. The text of the proposed rule change is available at FICC, the Commission's Public Reference Room, and *http://www.ficc.com/commondocs/rule.filings/rule.filing.06-20.pdf.* All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-FICC-2006-20 and should be submitted on or before February 22, 2007. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 11 11 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-1616 Filed 1-31-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55175; File No. SR-ISE-2007-07] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to a Pilot Program for Position and Exercise Limits for Options on the iShares® Russell 2000® Index Fund January 25, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on January 22, 2007, the International Securities Exchange, LLC (“ISE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by ISE. On January 22, 2007, ISE submitted Amendment No. 1 to the proposed rule change. ISE has filed the proposal pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 412 to exempt options on the iShares® Russell 2000® Index Fund (“IWM”) from the position and exercise limits provided for under the Rule 412 Pilot Program and to increase the standard position and exercise limits for IWM as part of a six-month pilot (“Rule 412 IWM Pilot Program”). The text of the proposed rule change is available at ISE, the Commission's Public Reference Room, and *http://www.iseoptions.com* . II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, ISE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. ISE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Supplementary Material .01 to Rule 412 on a six-month pilot basis to exempt options on IWM from the Rule 412 Pilot Program. Under the Rule 412 Pilot Program, the position and exercise limits for IWM would be reduced on January 22, 2007 from 500,000 to 250,000 contracts. The Exchange now proposes to allow position and exercise limits for options on IWM to remain at 500,000 contracts on a pilot basis, from January 22, 2007 through July 22, 2007. In June 2005, as a result of a 2-for-1 stock split, the position limit for IWM options was temporarily increased from 250,000 contracts (covering 25,000,000 shares) to 500,000 contracts (covering 50,000,000 shares). At the time of the split, the furthest IWM option expiration date was January 2007. Therefore, the temporary increase of the IWM position limit will revert to the pre-split level (as provided for in connection with the Rule 412 Pilot Program) of 250,000 contracts after expiration in January 2007, or on January 22, 2007. The Exchange believes that a position limit of 250,000 contracts is too low and may be a deterrent to the successful trading of IWM options. Importantly, options on IWM are 1/10th the size of options on the Russell 2000® Index (“RUT”), which has a position limit of 50,000 contracts. 5 Traders who trade IWM options to hedge positions in RUT options are likely to find a position limit of 250,000 contracts in IWM options too restrictive and insufficient to properly hedge. For example, if a trader held 50,000 RUT options and wanted to hedge that position with IWM options, the trader would, at a minimum, need 500,000 IWM options to properly hedge the position. Therefore, the Exchange believes that a position limit of 250,000 contracts is too low and may adversely affect market participants' ability to provide liquidity in this product. 5 *See* ISE Rule 2004(a). Additionally, IWM options have grown to become one of the largest options contracts in terms of trading volume. For example, the volume in options on IWM set a new single-day record on June 8, 2006, when 760,803 contracts (120,229 calls and 640,574 puts) traded on that day. This record level volume beat the previous single-day high of 727,521 contracts on May 17, 2006. Further, over the previous six months, the average daily ISE trading volume of IWM options has been 87,121 contracts and a total of 11,064,353 contracts have traded on the Exchange. As a result, the Exchange proposes that options on IWM be subject to position and exercise limits of 500,000 contracts on a pilot basis to run from January 22, 2007 through July 22, 2007. 6 The Exchange believes that increasing position and exercise limits for IWM options will lead to a more liquid and more competitive market environment for IWM options that will benefit customers interested in this product. 6 Pursuant to ISE Rule 414, the exercise limit established under Rule 414 for IWM options shall be equivalent to the position limit prescribed for IWM options in Supplementary Material .01 to Rule 412. The increased exercise limits would only be in effect during the pilot period, to run from January 22, 2007 through July 22, 2007. *See* Amendment No. 1 to the proposed rule change. The Exchange would require that each member or member organization that maintains a position on the same side of the market in excess of 10,000 contracts in the IWM option class, for its own account or for the account of a customer report certain information. 7 This data would include, but would not be limited to, the option position, whether such position is hedged and if so, a description of the hedge, and if applicable, the collateral used to carry the position. Exchange market-makers would continue to be exempt from this reporting requirement as market-maker information can be accessed through the Exchange's market surveillance systems. In addition, the general reporting requirement for customer accounts that maintain a position in excess of 200 contracts will remain at this level for IWM options. 8 7 *See* ISE Rule 415(b). 8 *See* ISE Rule 415(a). 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with and furthers the objectives of Section 6(b)(5) of the Act, 9 in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 9 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the forgoing rule change does not:

(1)Significantly affect the protection of investors or the public interest;

(2)impose any significant burden on competition; and

(1)Participate in the Penny Pilot Program, and

(2)state that the parameters of the Penny Pilot Program will be communicated to its members via Regulatory Information Circular. Currently, all six options exchanges, including ISE, quote options in nickel and dime increments. The minimum price variation for quotations in options series that are quoted at less than $3 per contract is $0.05 and the minimum price variation for quotations in options series that are quoted at $3 per contract or greater is $0.10. Under the Penny Pilot Program, beginning on January 26, 2007, market participants would be able to begin quoting in penny increments in certain series of option classes. The Penny Pilot Program would include the following thirteen options: Ishares Russell 2000 (IWM); NASDAQ-100 Index Tracking Stock (QQQQ); SemiConductor Holders Trust (SMH); General Electric Company (GE); Advanced Micro Devices, Inc. (AMD), Microsoft Corporation (MSFT); Intel Corporation (INTC); Caterpillar, Inc. (CAT); Whole Foods Market, Inc. (WFMI); Texas Instruments, Inc. (TXN); Flextronics International Ltd. (FLEX); Sun Microsystems, Inc. (SUNW); and Agilent Technologies, Inc. (A). The Exchange will communicate the list of options to be included in the Penny Pilot Program to its membership via Regulatory Information Circular. The minimum price variation increment for all classes included in the Penny Pilot Program, except for the QQQQs, would be $0.01 for all quotations in option series that are quoted at less than $3 per contract and $0.05 for all quotations in option series that are quoted at $3 per contract or greater. The QQQQs would be quoted in $0.01 increments for all options series. ISE commits to deliver a report to the Commission during the fourth month of the pilot, which would be composed of data from the first three months of trading. The report would analyze the impact of penny pricing on market quality and options system capacity. In addition, the Exchange will amend ISE Rule 716, which currently permits trades in the Exchange's Block, Facilitation and Solicitation Mechanisms to be effected at “split prices,” which are the mid-points of the current standard trading increments, to clarify that options trading in penny increments will not be eligible for split pricing. B. Quote Mitigation Strategies To mitigate quote message traffic, ISE has represented to the Commission that it intends to codify certain quote mitigation strategies, which are currently in place on the Exchange. 8 8 In addition to the quote mitigation strategies discussed herein, the ISE also proposed a fee program that requires market makers to purchase more APIs as the market maker generates more quotes, thus imposing economic incentives on market makers to limit the number of quotations they disseminate. *See* Securities Exchange Act Release No. 53522 (March 20, 2006), 71 FR 14975 (March 24, 2006) (SR-ISE-2006-09). ○ *Monitoring.* The ISE submits that it actively monitors the quotation activity of its market makers. When the Exchange detects that a market maker is disseminating significantly more quotes than an average market maker, the Exchange contacts that market maker and alerts it to such activity. Such monitoring frequently reveals that the market maker may have internal system issues or has incorrectly-set system parameters that were not immediately apparent. The Exchange believes that, even without uncovering problems, alerting a market maker to possible excessive quoting usually leads the market maker to take steps to reduce the number of its quotes. ○ *Holdback Timer.* The ISE has the systemic ability to limit the dissemination of quotations and other changes to the ISE best bid and offer according to prescribed time criteria (a “Holdback Timer”). For example, if there is a change in the price of a security underlying an option, multiple market makers likely will adjust the price or size of their quotes. Rather than disseminating each individual change, the Holdback Timer permits the Exchange to wait until all market makers have adjusted their quotes and then to disseminate a new quotation. This helps prevent the “flickering” of quotations. The ISE proposes to codify the Holdback Timer. As proposed in ISE Rule 804, the ISE will utilize a Holdback Timer that delays quotation updates for up to, but not longer than, one second. ○ *Delisting.* The ISE has committed to the Commission that it will delist options with average daily volume (“ADV”) of less than 20 contracts. 9 However, it has been the ISE's policy to be more aggressive in delisting relatively inactive options, thereby eliminating the quotation traffic attendant to such listings. Currently, it is the ISE's policy to delist options with ADV of less than 50, even with the advent of the Exchange's new “Second Market,” 10 which provides liquidity for less-active options. 9 *See* Securities Exchange Act Release No. 47483 (March 11, 2003), 68 FR 13352 (March 19, 2003) (SR-ISE-2003-04). 10 *See* Securities Exchange Act Release No. 54340 (August 21, 2006), 71 FR 51240 (August 29, 2006) (SR-ISE-2006-40). III. Discussion After careful review of the proposal, the comment letters and the Exchange's response thereto, the Commission finds that the proposed rule change, as modified by Amendment Nos. 1 and 2, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 11 In particular, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act, 12 which requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 11 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 12 15 U.S.C. 78f(b)(5). The Commission believes that the implementation of a limited six-month Penny Pilot Program by the ISE and the five other options exchanges will provide valuable information to the exchanges, the Commission and others about the impact of penny quoting in the options market. In particular, the Penny Pilot Program will allow analysis of the impact of penny quoting on:

(1)Spreads;

(2)transaction costs;

(3)payment for order flow; and

(4)quote message traffic. The Commission believes that the thirteen options classes to be included in the penny pilot program represent a diverse group of options classes with varied trading characteristics. This diversity should facilitate analyses by the Commission, the options exchanges and others. The Commission also believes that the Penny Pilot Program is sufficiently limited that it is unlikely to increase quote message traffic beyond the capacity of market participants' systems and disrupt the timely receipt of quote information. 13 Nevertheless, because the Commission expects that the Penny Pilot Program will increase quote message traffic, the Commission is also approving the Exchange's proposals to reduce the number of quotations it disseminates. 13 In addition, the Commission believes that it is appropriate for ISE to amend ISE Rule 716 to clarify that options trading in penny increments is not eligible for split pricing. In this regard, the commenters expressed concern about ISE's proposed quote mitigation strategy. In particular, although optionsXpress generally supported ISE's Holdback Timer, it expressed concern that a longer holdback timer period could negatively impact market quality and undermine transparency in the options market. 14 14 *See* optionsXpress Letter, *supra* note 4. OptionsXpress also stated its view that current problems with the intermarket linkage will be exacerbated in the option classes participating in the Penny Pilot Program. *Id.* In addition, SIFMA recommends that all six of the option exchanges adopt a comprehensive and uniform quote mitigation strategy. 15 In particular, SIFMA strongly supports the adoption of the Holdback Timer mitigation proposal as the most efficient means of reducing quotation traffic. SIFMA, however, expressed concern that the lack of uniformity among the quote mitigation proposals adopted by the exchanges will impose a burden on member firms and cause confusion for market participants, especially retail investors. 15 *See* SIFMA Letter, *supra* note 4. Although SIFMA urges the adoption of a uniform and comprehensive approach to quote mitigation, it does not oppose ISE's quote mitigation proposals. In fact, SIFMA acknowledges that certain of ISE's proposals, such as notifying members whose quote activity suggests systems malfunctions or wrong settings and delisting inactive series can contribute to quote mitigation. SIFMA, however, expressed its belief that these proposals do not go far enough to resolve the industry's concerns regarding systems capacity. The Commission supports efforts to implement a uniform, industry-wide quote mitigation plan. It does not, however, believe such efforts preclude individual exchanges from initiating their own quote mitigation strategies. The Commission does not believe that ISE's proposed quote mitigation strategies will lead to confusion among market participants. Finally, CBOE commented that it did not have a fundamental objection to ISE's use of the Holdback Timer, but instead sought additional information concerning how the Holdback Timer functions and how orders sent to ISE by CBOE members or by CBOE though linkage might be impacted by the Holdback Timer. 16 Specifically, CBOE requested additional information about the extent to which the Holdback Timer is utilized throughout the day and whether it is used uniformly in all option classes traded on ISE. In response, ISE indicated that it intends to use the Holdback Timer uniformly in all option classes. 17 In addition, the ISE committed to apply the Holdback Timer mechanism throughout the trading day for a period of up to, but no more than, one second. 18 In further response to inquiry from CBOE, the ISE represented that it does not intend to disclose the precise length of the timer to its members, to non-members or to the other exchanges. 19 16 *See* CBOE Letter, *supra* note 4. 17 Telephone conversation between Katherine Simmons, Deputy General Counsel, ISE, and Jennifer L. Colihan, Special Counsel and Cyndi N. Rodriguez, Special Counsel, Division of Market Regulation, Commission, on January 23, 2007. *See also* Exchange Response, *supra* note 6. 18 Telephone conversation between Katherine Simmons, Deputy General Counsel, ISE and Jennifer L. Colihan, Special Counsel, and Cyndi N. Rodriguez, Division of Market Regulation, Commission, on January 23, 2007. 19 *Id.* In addition, CBOE inquired whether the Holdback Timer will apply only to market maker quotations and asked the Exchange to clarify what information will be delayed by the Holdback Timer. ISE clarified that the Holdback Timer will be applied when there is a change in the price and/or size of the security underlying an option. The Exchange will wait (for a period up to one second) until multiple market participants have adjusted their quotes and then will disseminate a new quotation. The Exchange will apply the Holdback Timer to all data that it sends to OPRA. 20 Finally, in response to CBOE's inquiry regarding the treatment of incoming marketable orders, ISE indicated that Holdback Timer “does not affect the receipt or processing of quotes, orders or trades within the Exchange's system in any way.” 21 Therefore, incoming marketable orders sent to the Exchange will be executed against the prices and sizes available in ISE's system without regard to the application of the Holdback Timer. 22 20 *See* Exchange Response, *supra* note 7. 21 *Id.* 22 *Id.* IV. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 23 that the proposed rule change (SR-ISE-2006-62), as modified by Amendment Nos. 1 and 2, be, and hereby is, approved on a six-month pilot basis, which will commence on January 26, 2007. 23 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 24 24 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-1590 Filed 1-31-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55170; File Nos. SR-NASD-2006-131; SR-NYSE-2006-111; SR-Amex-2007-05] Self-Regulatory Organizations: National Association of Securities Dealers, Inc.; New York Stock Exchange LLC; American Stock Exchange LLC; Notice of Filing of Proposed Rule Changes To Increase the Frequency of the Short Interest Reporting Requirements January 26, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on December 4, 2006, December 7, 2006, and January 10, 2007, the National Association of Securities Dealers, Inc. (“NASD”), the New York Stock Exchange LLC (“NYSE”), and the American Stock Exchange LLC (“Amex”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule changes as described in Items I, II and III below, which Items have been prepared substantially by NASD, NYSE, or Amex. The Commission is publishing this notice to solicit comments on the proposed rule changes from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organizations' Statement of the Terms of Substance of the Proposed Rule Changes A. NASD NASD is proposing to increase the frequency of the short interest reporting requirements under Rule 3360 from monthly to twice per month. No changes to the text of NASD rules are required by this proposed rule change. B. NYSE NYSE is proposing an amendment to NYSE Rule 421.10 (Short Positions), which would increase the frequency of the short interest reporting requirements under Rule 421.10 from monthly to twice per month. In addition, NYSE is proposing additional amendments to the Rule 421.10's text in light of recent changes to NYSE organizational structure. The text of the proposed rule change is available at *http://www.NYSE.com* , at the NYSE, and at the Commission's Public Reference Room. C. Amex Amex proposes to increase the frequency of the short interest reporting requirements from monthly to twice a month, and to codify the short interest reporting requirement authorized by Amex Rule 30. The text of the proposed rule change is available at *http://www.Amex.com* , at Amex, and at the Commission's Public Reference Room. II. Self-Regulatory Organizations' Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In filings with the Commission, NASD, NYSE, and Amex included statements concerning the purpose of and basis for the proposed rule changes and discussed any comments received on the proposed rule changes. The text of these statements may be examined at the places specified in Item IV below. NASD, NYSE, and Amex have prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organizations' Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose A. NASD NASD is proposing to require members to record and report short interest position information to NASD twice per month. Currently, Rule 3360, Short-Interest Reporting, requires members to maintain a record of total short positions 3 in all customer and proprietary firm accounts in OTC Equity Securities 4 and securities listed on a national securities exchange if not reported to another self-regulatory organization (“SRO”) and to regularly report such information in the manner prescribed by NASD. 5 3 Short positions required to be reported under Rule 3360 are those resulting from “short sales” as the term is defined in Rule 200 of Regulation SHO, with the exception of positions that meet the requirements of subsections (e)(1), (6), (7), (8), and

(10)of Rule 10a-1 under the Exchange Act. *See* NASD Rule 3360(b)(1). As part of the Commission's approval of amendments to expand Rule 3360 to OTC equity securities, the Commission urged NASD to review these exceptions to short interest reporting to determine whether further rulemaking is appropriate. NASD is currently conducting such a review. If, based on this review, NASD concludes that further rulemaking is warranted, NASD will file a separate rule change with the Commission. *See* Exchange Act Release No. 53224 (February 3, 2006), 71 FR 7101 (February 10, 2006). 4 The term “OTC Equity Securities” refers to any equity security that is not listed on The Nasdaq Stock Market or a national securities exchange. 5 Non-self-clearing broker-dealers generally are considered to have satisfied their reporting requirement by making appropriate arrangements with their respective clearing organizations. *See Notice to Members* 03-08 (January 2003). Specifically, Rule 3360 requires that members report short positions as of the close of the settlement date designated by NASD and that the data be received by NASD no later than the second business day following the reporting settlement date designated by NASD. Currently, the designated settlement date is the 15th of each month, unless the 15th falls on a weekend or other non-settlement date, in which case the designated settlement date is the preceding settlement day. 6 The aggregate short interest data is, in turn, made publicly available. Investors and other interested parties may obtain the aggregate short interest data from NASDAQ's Web site, the OTCBB Web site, other commercial Web sites and certain newspapers. 6 A schedule of NASD's designated settlement dates can be found on NASD's Web site at *http://www.nasd.com.* NASD is proposing to require that members maintain and report to NASD short interest positions twice per month, such that the designated settlement dates would be the 15th (unless the 15th falls on a weekend or other non-settlement date, in which case the designated settlement date will be the preceding settlement day) and the last business day of each month. NASD will then make the short interest information publicly available twice per month. NASD believes that increasing the frequency of short interest reporting will provide additional and more timely information to public investors and other interested parties related to short selling. In recognition of the technological and systems changes the proposed rule change may require, the effective date will be six

(6)months following Commission approval of the proposed rule change. B. NYSE Proposal to Increase Frequency of Short Interest Reporting Requirement NYSE Rule 421 requires that member organizations submit to NYSE periodic reports with respect to short positions in securities, covering such time period as may be designated by NYSE. NYSE makes available to the marketplace the total short interest in each individual stock and warrant traded on NYSE. NYSE releases this data each month to media outlets such as Dow Jones, The Wall Street Journal, The New York Times, The New York Daily News and Bloomberg Services. This information provides some indication of market sentiment with respect to securities listed on NYSE. To better inform the investing public, NYSE is proposing to increase the frequency of short interest reporting pursuant to Rule 421.10 from monthly to twice per month. Specifically, NYSE is proposing that member organizations be required to maintain and report to NYSE short interest positions twice per month, such that the designated settlement dates would be the 15th 7 (unless the 15th falls on a weekend or other non-settlement date, in which case the designated settlement date will be the preceding settlement day) and the last business day of each month. Increased frequency of short interest reporting would provide additional and more timely information to public investors and other interested parties related to short selling. Upon Commission approval, NYSE membership would be notified of the new reporting requirement via Information Memo. NYSE proposes that this proposed rule change become effective 180 days after Commission approval of the filing in order to allow firms sufficient time to make any systems changes necessary to comply with the new requirement. 7 *See* ISG Regulatory Memorandum 95-01 (March 6, 1995), announcing, among other things, the adoption by the SROs of policies and procedures that require short interest position reporting for all securities traded in the United States as well as the frequency of reporting short interest positions to SROs. Amendments to Update NYSE Rule 421 NYSE is also proposing amendments that would update Rule 421.10 to reflect the adoption of the Commission's Regulation SHO. 8 Further, amendments are proposed to Rule 421.40 to update the rule by deleting subsections

(2)and

(3)which reference “convertible bond margin accounts” and “subscription accounts,” 9 because these types of accounts no longer exist. Rules 421.40(4) and

(5)are accordingly repositioned as 421.40(2) and (3). 8 17 CFR 242.200 through 242.203. 9 In 1984, the Federal Reserve Board amended Regulation T to eliminate convertible bond margin accounts and subscription accounts. Further, NYSE is proposing amendments to Rule 421 that would delete all references to the terms “member” and “allied member” as categories of Exchange association. The term “member” no longer has the same regulatory meaning in the context of the NYSE/ARCA 10 business model, which now authorizes “licensees” to trade on behalf of member organizations. Likewise, the term “allied member” has an incongruous connotation in the context of NYSE's current business model. 10 *See* Release No. 34-53382 (February 27, 2006), 71 FR 11251 (March 6, 2006) (order approving SR-NYSE-2005-77). C. Amex Amex is proposing to formalize the requirement that member organizations record short interest position information and report it to Amex twice a month. Currently, the Amex requires members to maintain a record of total short positions in all customer and proprietary firm accounts in equity securities (stocks, ETFs and other equity products) and to regularly report such information in the manner authorized by Amex Rule 30 and described in the Amex Minor Rule Violation Fine Systems (Amex Rule 590, Part 3), Amex Information Circulars 11 and an Intermarket Surveillance Group (“ISG”) Regulatory Memorandum. 12 The proposed amendment would incorporate the short interest reporting requirements into new Amex Rule 30A as well as increase the frequency of public reporting from once to twice a month for all equity securities. 11 *See* Amex Information Circulars #95-136 and #98-0234. 12 *See* ISG Regulatory Memorandum 95-01. Amex makes available to the marketplace the total short interest in each equity and equity-type security traded on Amex. Amex releases this data each month to major media outlets, such as Dow Jones, and posts it to Amex's Web site. This information provides some indication of market sentiment with respect to securities listed on Amex. Other exchanges and the NASD release comparable short interest information. As set forth in Amex Information Circular #95-136 and ISG Regulatory Memorandum 95-01, members must report short positions as of the close of the settlement dates designated by Amex and the data must be received by Amex no later than the second business day following the reporting settlement dates designated by Amex. Currently, the designated settlement date is the 15 th of each month, unless the 15 th falls on a weekend or other non-settlement date, in which case the designated settlement date is the preceding settlement day, and, for ETFs only, a second designated settlement date is the last business day of the month. The aggregate short interest data is, in turn, made publicly available to major news sources, twice a month with respect to ETFs, and once a month with respect to stocks, warrants and other equity products. Amex is proposing to increase the frequency with which it makes short interest reporting information publicly available for stocks, warrants and other equity securities (in addition to ETFs) from once a month (settlement date of the 15th) to twice a month. As proposed, the increased frequency of public short interest reporting will provide additional and timelier information to public investors and other interested parties related to short selling. Implementation of the proposed new Rule 30A will formalize the authority Amex currently obtains from a broad rule (Amex Rule 30) concerning periodic reports and the informational notices referenced above. The effective date will be 180 days following Commission approval of the proposed rule change. 2. Statutory Basis NASD, NYSE, and Amex believe that the proposed rule changes are consistent with the provisions of Sections 6(b)(5) 13 and 15A(b)(6) 14 of the Act, which require, among other things, that NASD, NYSE, and Amex rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. NASD, NYSE, and Amex believe that the proposed rule changes will provide additional and more timely information related to short selling. 13 15 U.S.C. 78f(b)(5). 14 15 U.S.C. 78o-3(b)(6). B. Self-Regulatory Organizations' Statement on Burden on Competition NASD, NYSE, and Amex do not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organizations' Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others A. NASD The proposed rule change was published for comment in NASD *Notice to Members* 05-63 (September 2005). Two comments were received in response to the *Notice.* 15 A copy of the *Notice to Members* is attached as Exhibit 2a and copies of the comment letters received in response to the *Notice* are attached as Exhibit 2c to NASD's filing which is available at *http://www.NASD.com* , at NASD, and at the Commission's Public Reference Room. 15 Comments were received from the following: Lisa Morel-Misener of Cognos Incorporated, dated October 27, 2005 and Christopher Charles of Wulff Hansen & Co., dated November 15, 2005. Of the two comment letters received, both were in favor of the proposed rule change. One commenter noted that minimal programming and costs would be required to implement this proposal, but recommended six months for implementation of the proposal. 16 The other commenter indicated that increases or decreases in short interest positions are significant indicators of investor sentiment. 17 As such, the commenter stated that timelier reporting of short interest data provides additional relevant information and more accurate indications of changes in investor outlook. 18 16 *See supra* note 14, Wulff Hansen & Co. letter. 17 *See supra* note 14, Cognos Incorporated letter. 18 *Id.* As noted above, in recognition of technological and systems changes that may be required to implement the proposed rule change, NASD has proposed an extended implementation period, which NASD believes will provide members adequate time to make any necessary changes. B. NYSE NYSE has neither solicited nor received written comments on the proposed rule change. C. Amex Amex has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Changes and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or

(ii)as to which the Exchange consents, the Commission will:

(A)By order approve such proposed rule change, or

(B)Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments The Commission notes that NASD, NYSE and Amex, are proposing an implementation period for the proposed rule changes. Specifically, the Commission notes that NASD, NYSE, and Amex are proposing that the proposed rule changes become effective 180 days (six months) after the Commission approval in order to allow firms sufficient time to make any systems changes necessary to comply with the new requirements. The Commission specifically requests comment regarding whether this implementation period could be shorter. Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Numbers SR-NASD-2006-131, SR-NYSE-2006-111, or SR-Amex-2007-05 as appropriate on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Numbers SR-NASD-2006-131, SR-NYSE-2006-111, or SR-AMEX-2007-05, as appropriate. These file numbers should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml).* Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal offices of NASD, NYSE or Amex, as appropriate. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Numbers SR-NASD-2006-131, SR-NYSE-2006-111, or SR-Amex-2007-05, as appropriate, and should be submitted on or before February 22, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 19 19 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-1584 Filed 1-31-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55156; File No. SR-NYSEArca-2006-73] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval to Proposed Rule Change as Modified by Amendment No. 1 Thereto, To Create an Options Penny Pilot Program January 23, 2007. I. Introduction On October 10, 2006, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 a proposed rule change to amend the NYSE Arca Rules to permit certain option classes to be quoted in pennies on a pilot basis and to adopt a quote mitigation strategy. The proposed rule change was published for comment in the **Federal Register** on October 18, 2006. 3 The Commission received three comment letters on the proposed rule change. 4 On December 1, 2006, the Exchange filed Amendment No. 1 to the proposed rule change. 5 The Exchange responded to the comment letters on January 9, 2007. 6 This order approves the proposed rule change as modified by Amendment No. 1. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 54590 (October 12, 2006), 71 FR 61525. 4 *See* letters to Nancy M. Morris, Secretary, Commission, from Wayne Jervis, Managing Member of the General Partner, Jervis Alternative Asset Management Co. (“JAAMCO”), dated January 7, 2007 (“JAAMCO Letter”); from Christopher Nagy, Chair, Securities Industry and Financial Markets Association (“SIFMA”) Options Committee, dated December 20, 2006 (“SIFMA Letter”); and from Peter J. Bottini, Executive Vice-President, optionsXpress, Inc. (“optionsXpress”), dated October 31, 2006 (“optionsXpress Letter”). 5 Among other things, Amendment No. 1 proposed to replace Glamis Gold, which was delisted, with Agilent Tech, Inc. in the list of options classes permitted to be quoted in pennies. Amendment No. 1 is technical in nature, and the Commission is not publishing Amendment No. 1 for public comment. 6 *See* letter to Nancy M. Morris, Secretary, Commission, from Mary Yeager, Corporate Secretary, NYSE Arca, dated January 9, 2007 (“Exchange Response”). II. Description of the Proposal A. Scope of the Penny Pilot Program NYSE Arca proposes to amend its rules to permit certain options classes to be quoted in pennies during a six-month pilot (“Penny Pilot Program”), which would commence on January 26, 2007. Specifically, the Exchange proposes to

(1)clarify the language in NYSE Arca Rule 6.72, which sets forth the minimum increments for options quoted on the Exchange;

(2)add a reference in Rule 6.72 to the Penny Pilot Program; and

(3)provide for an approved quote mitigation exception to NYSE Arca Rule 6.86. Currently, all six options exchanges, including NYSE Arca, quote options in nickel and dime increments. The minimum price variation for quotations in options series that are quoted at less than $3 per contract is $0.05 and the minimum price variation for quotations in options series that are quoted at $3 per contract or greater is $0.10. Under the Penny Pilot Program, beginning on January 26, 2007, market participants would be able to begin quoting in penny increments in certain series of option classes. The Penny Pilot Program would include the following thirteen options: Ishares Russell 2000 (IWM); NASDAQ-100 Index Tracking Stock (QQQQ); SemiConductor Holders Trust (SMH); General Electric Company (GE); Advanced Micro Devices, Inc. (AMD), (Microsoft Corporation (MSFT); Intel Corporation (INTC); Caterpillar, Inc. (CAT); Whole Foods Market, Inc. (WFMI); Texas Instruments, Inc. (TXN); Flextronics International Ltd. (FLEX); Sun Microsystems, Inc. (SUNW); and Agilent Technologies, Inc. (A). The minimum price variation for all classes included in the Penny Pilot Program, except for the QQQQs, would be $0.01 for all quotations in option series that are quoted at less than $3 per contract and $0.05 for all quotations in option series that are quoted at $3 per contract or greater. The QQQQs would be quoted in $0.01 increments for all options series. 7 7 In Amendment No. 1, NYSE Arca requested that an additional option class be designated to quote and trade all series in pennies. In its comment letter, JAAMCO also expressed strong support for penny increments in all listed options. *See* JAAMCO Letter, *supra* note 4. NYSE Arca commits to deliver a report to the Commission during the fourth month of the pilot, which would be composed of data from the first three months of trading. The report would analyze the impact of penny pricing on market quality and options system capacity. B. Quote Mitigation Proposal NYSE Arca Rule 6.86 describes the obligations of the Exchange to collect, process and make available to quotation vendors the best bid and best offer for each option series that is a reported security. The Exchange proposes an exception to making quotes available to quotation vendors as part of an approved quote mitigation plan. The quote mitigation strategy proposed by the Exchange is intended to reduce the number of quotations generated by NYSE Arca for all option issues traded at NYSE Arca, not just issues included in the Penny Pilot Program. NYSE Arca plans to reduce the number of quote messages it sends to the Options Price Reporting Authority (“OPRA”) by only submitting quote messages for “active” options series. Active options series will be defined as:

(i)The series has traded on any options exchange in the previous 14 calendar days;

(ii)the series is solely listed on NYSE Arca;

(iii)the series has been trading ten days or less; or

(iv)the Exchange has an order in the series. For any option series that falls into one of the aforementioned categories, NYSE Arca will submit quotes to OPRA as it currently does. For any options series that falls outside of the above categories, NYSE Arca will still accept quotes from OTP Holders in these series; however, such quotes will not be disseminated to OPRA. In addition, under the proposal, there are certain instances when a series would become active intraday. This would occur if:

(i)The series trades at any options exchange;

(ii)NYSE Arca receives an order in the series; or

(iii)NYSE Arca receives a request for quote from a customer in that series. When one of the above circumstances exists, NYSE Arca would immediately begin disseminating quotes to OPRA in that particular series and would continue doing so until that series fell outside of the active series definition. If the series does not trade, and there are no orders in the series the next day, the series would no longer be considered active. Finally, because NYSE Arca will continue to collect quotes from OTP Holders in inactive series, upon receiving an order in an inactive series, the Exchange will either execute that order against any marketable quotes in the trading system, or will link that order to the away market displaying the NBBO in that series. Accordingly, OTP Holders' orders will not be disadvantaged and will still have an opportunity to execute at the best price in such inactive series. By limiting quote dissemination to solely active series as described above, the Exchange anticipates that it will reduce quote message traffic by 20-30%. III. Discussion After careful review of the proposal, the comment letters, and the Exchange's response thereto, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 8 In particular, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act, 9 which requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. 8 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 9 15 U.S.C. 78f(b)(5). The Commission believes that the implementation of a limited six-month Penny Pilot Program by NYSE Arca and the five other options exchanges will provide valuable information to the exchanges, the Commission and others about the impact of penny quoting in the options market. In particular, the Penny Pilot Program will allow analysis of the impact of penny quoting on:

(1)Spreads;

(2)transaction costs;

(3)payment for order flow; and

(2)prohibits Internalization of order flow to the extent that it disadvantages the customer,

(3)has pricing linked to all listed options exchanges,

(4)does not exclude options above $3.00 in value, and

(5)does not exclude illiquid/not-daily-traded options.” JAAMCO Letter, *supra* note 4. In addition, SIFMA recommended that all six of the option exchanges adopt a comprehensive and uniform quote mitigation strategy. In particular, SIFMA strongly supports the adoption of the “holdback timer” mitigation proposal as the most efficient means of reducing quotation traffic. SIFMA expressed concern that the lack of uniformity among the quote mitigation proposals adopted by the exchanges will impose a burden on member firms and cause confusion for market participants, especially retail investors. Although the Commission supports efforts to implement a uniform, industry-wide quote mitigation plan, it does not believe such efforts preclude individual exchanges from initiating their own quote mitigation strategies. The Exchange stated its belief that, “by not burdening the marketplace with excessive quotes, in series that have proven to have little or no investor interest, the Exchange will have the ability to supply additional quoting activity where most needed, thereby creating liquidity and a more competitive marketplace, which in turn should provide increased opportunities for all investors.” 12 In addition, the Exchange clarified that it will continue to collect and process quotes from Exchange Market Makers and will publish a quote upon a trade at another market or upon receipt of an order in that series. 12 *See* Exchange Response, *supra* note 6. The Commission believes that NYSE Arca's proposed quote mitigation strategy is consistent with the Act and that it is unlikely to lead to confusion among market participants. In this regard, the Commission notes that Exchanges do not currently quote the identical series and classes of options. Furthermore, the Exchange has committed to provide a thorough study of the impact that its quote mitigation plan has on, among other things, system capacity problems or other problems that arose related to the operation of the Penny Pilot Program. Consequently, the Commission believes there are sufficient safeguards in place to analyze and, if necessary, address any negative impact that may result from NYSE Arca's proposal to disseminate quotes only in “active options series” as defined by Commentary .03 to NYSE Arca Rule 6.86. IV. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 13 that the proposed rule change (SR-NYSEArca-2006-73), as modified by Amendment No. 1, be, and hereby is, approved on a six-month pilot basis, which will commence on January 26, 2007. 13 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-1589 Filed 1-31-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55178; File No. SR-NYSEArca-2007-02] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to NYSE Arca Marketplace Trading Sessions January 25, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on January 12, 2007, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”), through its wholly owned subsidiary NYSE Arca Equities, Inc. (“NYSE Arca Equities”), filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Exchange filed the proposal pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposed rule change effective upon filing with the Commission. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to update the list in NYSE Arca Equities Rule 7.34 of securities eligible to trade in one or more, but not all three, of the Exchange's trading sessions. The securities to be added to the list are :

(1)Claymore MACROshares Oil Up Tradeable Shares and

(2)Claymore MACROshares Oil Down Tradeable Shares. These securities are traded on NYSE Arca, L.L.C. (“NYSE Arca Marketplace”), the equities trading facility of NYSE Arca Equities, pursuant to unlisted trading privileges (“UTP”) and are described in NYSE Arca Equities Rule 8.400 (“Paired Trust Shares”). The Exchange also proposes to include a reference to NYSE Arca Equities Rule 8.400 in NYSE Arca Equities Rules 7.34(a)(3)(A) and 7.34(a)(4)(A). The text of the proposed rule change is available on the Exchange's Web site ( *http://www.nysearca.com* ), at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose NYSE Arca Equities Rule 7.34 currently provides, in part, that the NYSE Arca Marketplace shall have three trading sessions each day: an Opening Session (1 a.m. Pacific Time (“PT”) to 6:30 a.m. PT), a Core Trading Session (6:30 a.m. PT to 1 p.m. PT), and a Late Trading Session (1 p.m. PT to 5 p.m. PT), and that the Core Trading Session for securities described in NYSE Arca Equities Rules 5.1(b)(13), 5.1(b)(18), 5.2(j)(3), 8.100, 8.200, 8.201, 8.202, 8.203, and 8.300 (each, a “Derivative Securities Product”) shall conclude at 1:15 pm (PT). 5 The Exchange proposes to amend NYSE Arca Equities Rule 7.34(a)(3)(A) to add Paired Trust Shares described in NYSE Arca Equities Rule 8.400 to the securities for which the Core Trading Session concludes at 1:15 p.m. PT. 6 5 NYSE Arca Equities Rules 5.1(b)(13), 5.2(j)(3), 8.100, 8.200, 8.201, 8.202, 8.203, and 8.300 relate to Unit Investment Trusts, Investment Company Units and Portfolio Depositary Receipts, Trust Issued Receipts, Commodity-Based Trust Shares, Currency Trust Shares, Commodity Index Trust Shares, and Partnership Units, respectively. *See* Securities Exchange Act Release No. 54997 (December 21, 2006), 71 FR 78501 (December 29, 2006) (SR-NYSEArca-2006-77) (relating to amendments to NYSE Arca Equities Rule 7.34). 6 In Securities Exchange Act Release No. 55033 (December 29, 2006), 72 FR 1253 (January 10, 2007) (SR-NYSEArca-2006-75), the Commission approved NYSE Arca Equities Rule 8.400 to permit trading on the NYSE Arca Marketplace, either by listing or pursuant to UTP, of securities issued by a pair of related trusts and based on an index or other numerical variable whose value reflects the value of assets, prices, or other economic interests. The Commission also approved in this filing the trading, pursuant to UTP, of the Claymore MACROshares Oil Up Tradeable Shares and Claymore MACROshares Oil Down Tradeable Shares. The Exchange also includes in NYSE Arca Equities Rule 7.34 a list of those securities which are eligible to trade in one or more, but not all three, of the Exchange's trading sessions, and maintains on its Web site a list that identifies all securities traded on the NYSE Arca Marketplace that do not trade for the duration of each of the three sessions specified in NYSE Arca Equities Rule 7.34. The Exchange proposes to add the following securities to these lists:

(1)Claymore MACROshares Oil Up Tradeable Shares and

(2)Claymore MACROshares Oil Down Tradeable Shares. 7 These securities are traded on the Exchange pursuant to UTP and are Paired Trust Shares, as described in NYSE Arca Equities Rule 8.400. 7 *See* note 5, *supra.* Finally, the Exchange proposes to amend NYSE Arca Equities Rule 7.34(a)(4)(A) relating to trading halt procedures applicable to trading specified Derivative Securities Products on a UTP basis in the Opening, Core, and Late Trading Sessions. The Exchange proposes to add Paired Trust Shares described in NYSE Arca Equities Rule 8.400 to the list of Derivative Securities Products to which NYSE Arca Equities Rule 7.34(a)(4)(A) applies. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act, 8 in general, and furthers the objectives of section 6(b)(5) 9 in particular, in that it is designed to facilitate transactions in securities, to promote just and equitable principles of trade, to enhance competition, and to protect investors and the public interest. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not:

(i)Significantly affect the protection of investors or the public interest;

(ii)impose any significant burden on competition; and

(iii)become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, it has become effective pursuant to section 19(b)(3)(A) of the Act 10 and rule 19b-4(f)(6) thereunder. 11 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires an exchange to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Commission has determined to waive the five-day pre-filing notice requirement in this case. The Exchange has asked the Commission to waive the 30-day operative delay. The Commission believes that such waiver is consistent with the protection of investors and the public interest because the proposed rule change should provide transparency and more clarity with respect to the trading hours eligibility of certain derivative securities products and should promote consistency in the trading halts of derivative securities. For these reasons, the Commission designates the proposed rule change as operative immediately. 12 12 For purposes only of accelerating the operative date of this proposal, the Commission has considered the rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). At any time within 60 days of the filing of the proposed rule change the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send e-mail to *rule-comments@sec.gov* . Please include File Number SR-NYSEArca-2007-02 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEArca-2007-02. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro/shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2007-02 and should be submitted by February 22, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 13 13 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-1593 Filed 1-31-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55151; File No. SR-OCC-2006-16] Self-Regulatory Organizations; The Options Clearing Corporation; Order Granting Approval of a Proposed Rule Change Relating to the Definition of Fund Share January 23, 2007. I. Introduction On September 21, 2006, The Options Clearing Corporation (“OCC”) filed with the Securities and Exchange Commission (“Commission”) proposed rule change SR-OCC-2006-16 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”). 1 Notice of the proposal was published in the **Federal Register** on November 28, 2006. 2 No comment letters were received. For the reasons discussed below, the Commission is granting approval of the proposed rule change. 1 15 U.S.C. 78s(b)(1). 2 Securities Exchange Act Release No. 54786, (November 20, 2006), 71 FR 68872. II. Description OCC issues and clears options on “fund shares” that are defined in Article I of OCC's By-Laws as a publicly traded interest in a trust, investment company, or other entity holding portfolios or baskets of securities. 3 The rule change amends the definition of “fund share” in order to accommodate requests from OCC participant exchanges that OCC clear and settle options on exchange traded fund (“ETF”) shares that represent interests in an entity holding euros and investing the euros in time deposits. 4 Specifically, the rule change amends the definition to include interests in entities holding portfolios or baskets of currencies, including single currencies. The definition would also be revised to make it clear that

(i)it includes entities with actively managed portfolios and

(ii)it applies only to entities principally engaged in holding portfolios or baskets of securities or currencies and not to entities that do so as an incident to some other business. 3 Securities Exchange Act Release No. 46914 (November 26, 2002), 67 FR 72261 (December 4, 2002) [File No. SR-OCC-2002-22]. 4 Securities and Exchange Act Release Nos. 54087 (June 30, 2006), 71 FR 38918 (July 10, 2006) [File No. SR-ISE-2005-60] and 54983 (December 20, 2006), 71 FR 78476 (December 29, 2006) [File No. SR-AMEX-2006-87] (Orders approving a proposed rule change to allow listing and trading of fund shares that hold specified non-U.S. currency options, futures or options on futures on such currency, or any other derivatives based on such currency). If approved by the Commission, the proposed rule change would not be implemented until definitive copies of an appropriate supplement to the options disclosure document, *Characteristics and Risks of Standardized Options* , are available for distribution. III. Discussion Section 17A(b)(3)(F) of the Act requires, among other things, that the rules of a clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions. 5 The purpose of the proposed rule change is to amend OCC's By-Laws and Rules so that OCC may clear and settle options on ETF shares that represent interest in an entity that holds currencies, including single currencies. Accordingly, the proposed rule change should promote the prompt and accurate clearance and settlement of such securities transactions. 5 15 U.S.C. 78q-1(b)(3)(F). IV. Conclusion On the basis of the foregoing, the Commission finds that the proposed rule change is consistent with the requirements of the Act and in particular Section 17A of the Act and the rules and regulations thereunder. 6 6 In approving the proposed rule change, the Commission considered the proposal's impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, that the proposed rule change (File No. SR-OCC-2006-16) be and hereby is approved. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 7 7 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-1585 Filed 1-31-07; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55152; File No. SR-OCC-2006-17] Self-Regulatory Organizations; The Options Clearing Corporation; Order Granting Approval of a Proposed Rule Change Relating to the Definition of Fund Share and Options on Commodity Pool ETFs January 23, 2007. I. Introduction On September 21, 2006, The Options Clearing Corporation (“OCC”) filed with the Securities and Exchange Commission (“Commission”) proposed rule change SR-OCC-2006-17 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”). 1 Notice of the proposal was published in the **Federal Register** on November 28, 2006. 2 No comment letters were received. For the reasons discussed below, the Commission is granting approval of the proposed rule change. 1 15 U.S.C. 78s(b)(1). 2 Securities Exchange Act Release No. 54784, (November 20, 2006), 71 FR 68871. II. Description The rule change permits OCC to issue, clear, and settle options on equity interests issued by exchange-traded funds (“ETFs”) that trade directly or indirectly in commodity futures products and are therefore subject to regulation by the Commodity Futures Trading Commission (“CFTC”) as commodity pools. The American Stock Exchange recently filed a proposed rule change to list and trade options on

(1)interests ( “Interests”) issued by the DB Commodity Index Tracking Fund (“DBC Fund”), whose value is intended to track the performance of the “Deutsche Bank Liquid Commodity Index tm —Excess Return” and

(2)units issued by the United States Oil Fund, L.P. (“Oil Fund”), whose value is intended to track the spot price of West Texas Intermediate light, sweet crude oil delivered to Cushing, Oklahoma, less Oil Fund expenses. 3 3 File No. SR-AMEX-2006-110. *See* Securities Exchange Act Release Nos. 54450 (September 14, 2006) 71 FR 55230 (September 21, 2006) [File No. SR-AMEX-2006-44] and 53582 (March 31, 2006) 71 FR 17510 (April 6, 2006) [File No. SR-AMEX-2005-127] for more detailed descriptions of the DBC Fund and of the Oil Fund. The interests and the units are freely transferable and may be bought and sold like any other ETF interest or other exchange-listed security. In addition to options on the Interests and the Units, there may be other similar options on ETFs regulated by the CFTC as commodity pools that OCC may be asked to issue, clear, and settle in the future. The definition of “fund share” in Article I of OCC's By-Laws is currently limited to shares in entities “holding portfolios or baskets of securities.” However, the Oil Fund invests directly in commodity futures contracts. Additionally, although as a technical matter the DBC Fund invests exclusively in securities, entities such as the DBC Fund that invest in the securities issued by a commodity pool are themselves deemed to be commodity pools because they represent an indirect investment in commodity futures contracts. OCC is therefore amending the definition of “fund share” in Article I of its By-Laws to specifically refer to interests in an entity that is a commodity pool. The definition is revised to make it clear that it includes feeder funds. The proposed rule change will not be implemented until definitive copies of an appropriate supplement to the options disclosure document, *Characteristics and Risks of Standardized Options* , are available for distribution. III. Discussion Section 17A(b)(3)(F) of the Act requires, among other things, that the rules of a clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions. 4 The purpose of the proposed rule change is to amend OCC's By-Laws so that OCC may clear and settle options on equity interests issued by ETFs that trade directly or indirectly in commodity futures products. Accordingly, the proposed rule change should promote the prompt and accurate clearance and settlement of securities transactions. 4 15 U.S.C. 78q-1(b)(3)(F). IV. Conclusion On the basis of the foregoing, the Commission finds that the proposed rule change is consistent with the requirements of the Act and in particular Section 17A of the Act and the rules and regulations thereunder. 5 5 In approving the proposed rule change, the Commission considered the proposal's impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, that the proposed rule change (File No. SR-OCC-2006-17) be and hereby is approved. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 6 6 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-1588 Filed 1-31-07; 8:45 am] BILLING CODE 8011-01-P SOCIAL SECURITY ADMINISTRATION Agency Information Collection Activities: Proposed Request and Comment Request The Social Security Administration

(SSA)publishes a list of information collection packages that will require clearance by the Office of Management and Budget

(OMB)in compliance with Public Law 104-13, the Paperwork Reduction Act of 1995, effective October 1, 1995. The information collection packages that may be included in this notice are for new information collections and revisions to OMB-approved information collections. SSA is soliciting comments on the accuracy of the agency's burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and on ways to minimize burden on respondents, including the use of automated collection techniques or other forms of information technology. Written comments and recommendations regarding the information collection(s) should be submitted to the OMB Desk Officer and the SSA Reports Clearance Officer. The information can be mailed and/or faxed to the individuals at the addresses and fax numbers listed below: (OMB), Office of Management and Budget, Attn: Desk Officer for SSA, Fax: 202-395-6974. (SSA), Social Security Administration, DCFAM, Attn: Reports Clearance Officer, 1333 Annex Building, 6401 Security Blvd., Baltimore, MD 21235, Fax: 410-965-6400. I. The information collection listed below is pending at SSA and will be submitted to OMB within 60 days from the date of this notice. Therefore, your comments should be submitted to SSA within 60 days from the date of this publication. You can obtain copies of the collection instrument by calling the SSA Reports Clearance Officer at 410-965-0454 or by writing to the address listed above. SSA Guidance for Use of the Tax Information Authorization Form—0960-NEW. The Internal Revenue Service

(IRS)Form 8821 is used by taxpayers to authorize the release of tax information to a third party. The IRS agrees that a properly completed IRS Form 8821 is an appropriate means of designating the Department of Health and Human Services

(HHS)to receive the tax information of a Medicare Part B beneficiary who has appealed a determination of Income-Related Monthly Adjustment Amount (IRMAA). Specifically, Medicare Part B beneficiaries who wish to appeal SSA's reconsideration of their IRMAA amounts will be sent a copy of the HA-501 (Request for Hearing by an Administrative Law Judge) and with it the IRS Form 8821, which will enable beneficiaries to authorize disclosure of their relevant beneficiary tax data to HHS for use in conducting the appeals hearing. The respondents are Medicare Part B beneficiaries who want to request an appeal of their IRMAA amount. *Type of Request:* Request for full approval for a collection cleared under OMB emergency clearance procedures. *Number of Respondents:* 6,000. *Frequency of Response:* 1. *Average Burden Per Response:* 15 minutes. *Estimated Annual Burden:* 1,500 hours. II. The information collection listed below has been submitted to OMB for clearance. Your comments on the information collection would be most useful if received by OMB and SSA within 30 days from the date of this publication. You can obtain a copy of the OMB clearance package by calling the SSA Reports Clearance Officer at 410-965-0454, or by writing to the address listed above. Representative Payee Report—20 CFR 404.265 and 416.665—0960-0691. Form SSA-6234 is used to collect information from organizational representative payees, such as institutions, to determine if

(1)payments sent to these representative payees have been used for Social Security beneficiaries' current maintenance and personal needs;

(2)the representative payees continue to be capable representatives concerned with beneficiaries' welfare; and

(3)the representative payee organization is charging the beneficiary a fee, and if so, the amount of the fee. The respondents are organizational representative payees. *Type of Request:* Revision of an OMB-approved collection. *Number of Respondents:* 750,000. *Frequency of Response:* 1. *Average Burden Per Response:* 15 minutes. *Estimated Annual Burden:* 187,500. Dated: January 26, 2007. Elizabeth A. Davidson, Reports Clearance Officer, Social Security Administration. [FR Doc. E7-1625 Filed 1-31-07; 8:45 am] BILLING CODE 4191-02-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Notice of Intent To Rule on Request To Release Airport Property at the Des Moines International Airport, Des Moines, IA AGENCY: Federal Aviation Administration, (FAA), DOT. ACTION: Notice of Request to Release Airport Property. SUMMARY: The FAA proposes to rule and invites public comment on the release of land at the Des Moines International Airport under the provisions of Section 125 of the Wendell H. Ford Aviation Investment Reform Act for the 21st Century (AIR 21). DATES: Comments must be received on or before March 5, 2007. ADDRESSES: Comments on this application may be mailed or delivered to the FAA at the following address: Federal Aviation Administration, Central Region, Airports Division, 901 Locust, Kansas City, Missouri 64106-2325. In addition, one copy of any comments submitted to the FAA must be mailed or delivered to Craig Smith, Aviation Director, at the following address: City of Des Moines, Des Moines International Airport, 5800 Fleur Drive, Des Moines, Iowa 50321-2854. FOR FURTHER INFORMATION CONTACT: Nicoletta Oliver, Airports Compliance Specialist, FAA, Central Region, 901 Locust, Kansas City, MO 64106-2325,

(816)329-2642. The request to release property may be reviewed in person at this same location. SUPPLEMENTARY INFORMATION: The FAA proposes to rule and invites public comment on the request to release property at the Des Moines International Airport under the provisions of AIR 21. On January 19, 2007, the FAA determined that the request to release property at the Des Moines International Airport submitted by the City of Des Moines, met the procedural requirements of the Federal Aviation Administration. The FAA will approve or disapprove the request, in whole or in part, no later than April 30, 2007. The following is a brief overview of the request. The City of Des Moines requests the release of approximately 5.07 acres of airport property. The land is not being used for future aeronautical purposes. The release of the property will allow for the sale of the land to generate revenue for the airport. The proceeds would be used for future FAA Airport Improvement Program

(AIP)eligible projects at the Des Moines International Airport. Any person may inspect the request in person at the FAA office listed above under FOR FURTHER INFORMATION CONTACT. In addition, any person may, upon request, inspect the application, notice and other documents germane to the request in person at the City of Des Moines, Des Moines, Iowa. Issued in Kansas City, Missouri, on January 19, 2007. George A. Hendon, Manager, Airports Division, Central Region. [FR Doc. 07-437 Filed 1-31-07; 8:45 am]

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